> Is the norm really that home loans are unaffordable even to first-time-buyer DINKs with good-to-decent six figure jobs who just want a place to live?

The home loans are unaffordable because the house prices are too high. The median house price in 1989 was around $95K ($230K adjusted for inflation). Today it's about $400K.

Are houses today the same as houses in 1989? Seems like you'd need a much more detailed analysis than median price to compare apples to apples.

That doesn’t matter to buyers.

If the housing stock is too expensive for the population there can be many causes, and higher quality or larger size housing is just another cause. The causes of the high prices don’t matter to buyers, all they know is they can’t afford to buy. What use is it to them that the homes they can’t afford are better quality?

With the amount of housing turnover in the past few years, to me it seems that plenty of people can afford to buy. Actually an unfortunate amount.

The improvements in home construction have diminishing returns. For example my county now requires residential fire sprinkler systems. Such systems aren’t cheap but also don’t provide any real payoff to homeowner on average.

Improved insulation and air sealing is nice, but you’re not going to see anything close to $200k in energy savings over the building’s life vs just blasting your furnace to a comfortable temperature.

Houses certainly have increased in size though.

Given that the median age of a home in 2019 was 39, that puts half of today's housing stock as being built in 1980 or before. So most of "today's houses" are literally the same houses that were present in 1989, just with three decades of additional depreciation. This is even worse in older, populous parts of the country like California and the Northeast that haven't built as many new homes as in the Southeast. In California and New York, for instance, people are squabbling to pay $1m+ for 43-60 year-old homes. People today are paying more, and getting less for their money.

https://eyeonhousing.org/2021/03/age-of-housing-stock-by-sta...

Those same homes you bought in 1989 are still around. Home construction at the time it was built has little to do with home prices.

There's a serious housing shortage.

https://www.npr.org/2022/07/14/1109345201/theres-a-massive-h...

Worryingly, the higher interest rates are making it more difficult to construct the housing we so desperately need in so many places.

There is a housing shortage because large, often foreign, organizations are buying up all of the housing stock.

Mom & Pop trying to get a couple of AirBnB's ain't helping either.

I'm involved in housing politics where I live. I go to hearings, pay attention to what's coming through the planning department. I see what causes housing to not be built. It's NIMBYs. My neighbors. Not some far-off bogeyman". The reason big companies got into the housing market is because there are good returns, because it's difficult to build housing. Why? NIMBYs. The best way to stick it to the big companies is to build enough housing.

https://www.theatlantic.com/ideas/archive/2023/01/housing-cr...

Institutional investors represent less than 10% of home sales. Even still, they're buying houses because they realize there aren't enough of them. If we had enough houses it wouldn't be profitable for them to buy them.

Can your kids afford an $851/month mortgage? https://www.redfin.com/IA/Cedar-Rapids/6835-Preston-Terrace-...

Or $1600/month? This has a nursery so they can fix the dink: https://www.redfin.com/MD/Pasadena/3500K-Lochearn-Ct-21122/u...

“Fix the dink” just hit my funny bone for some reason. Now I can’t stop giggling and saying it to myself

Yes, it's normal when housing prices have massively inflated due to ultra-low interest rates, then rates returned to normal.

If DINKs can't afford it, what does that tell you about the direction housing prices will go?

> If DINKs can't afford it, what does that tell you about the direction housing prices will go?

The ones with capital will buy them, and you will be renting.

Clearly not since housing prices are falling due to affordability.

And if you look at the capital buying up houses, it's a tiny fraction of all available housing out there.

The correct answer is - just like when housing prices went up with low interest rates, they'll go down with high interest rates.

Housing prices are not falling.

Yes they are.

Seems like a pretty risky investment. Especially as fewer and fewer people will have anything to gain from the NIMBY policies artificially increasing prices.

The market (and NIMBY regs) can stay irrational longer than you can stay housed.

Historically speaking, investing in property/land has never turned out risky. Initial cost has little significance in total profit calculation as long as you can seek rent indefinitely.

> If DINKs can't afford it, what does that tell you about the direction housing prices will go?

Elites and wealthy boomers will keep soaking up resources, then prices may become volatile in a southward direction.

In the meantime, the current generation is frozen in place, unable to progress in a rigged game.

> Have you personally already purchased your first home? Without family assistance, it would be absolutely brutal and untenable for my children to enter into in this domain at present.

I haven't, but I'm not a DINK, and have never broken six figures.

The right credit union will make a home loan with no money down, which might help your kids and their spouses. I'm currently paying $3k/month for rent. Zillow says that this could afford a $350,965 home with a 30-year 6.833% fixed rate, including 1.2% taxes at $351/month and $800/year in homeowner's insurance at $67/month, and mortgage insurance at $287/month. Not possible in this area, but possible elsewhere.

Hardly possible in my state! $350k gets you a fixer upper 2br 1bath

That's basically what I'm paying $3k rent for here. Sounds nice. Buying a house like that outright is probably in the $500k+ range here.

Yeah it sucks.

I mentioned to my Dad that I was lucky to be able to buy a house for the first time just before rates went up. He told me the story of how he bought his first house in 1977 - the house I grew up in. The rate was 19%, and he was only able to get a loan because he knew a guy who knew a guy at the bank. He had masters degree and a good job, but all the banks turned him down until he found the right strings to pull.

Our long term family home, bought in 1981, was done as a land contract at 16%. Apparently was tough to refinance down to 10% - original owner moved across the country, and was dragging their feet on signing papers, pushing back, etc. They were about to lose a 16% return and delayed for close to a year.

Upper middle class starts at $156,000. They can’t afford a home at that income level?

Source for this?