Very true...
My home when I bought it was about 2x my annual income, my home today is worth on the market about 2x my current annual income.
The average factory worker (or teacher) in my area could easily afford to buy my home in a standard 2 person income situation.
Now if you go into the new construction area's of this city, the houses there start at 2x the price of my home. I am a relatively high income earner though that is offsite by the fact I live alone so no dual income. On paper I could afford one of those homes, but I would never go that far into debt, which is why I own the home I do. I bought in a modest neighborhood and a modest home.
Currently average home prices in my area are 3.5x median household incomes, which is up from 2.25x in 2016... This is largely drive by the new construction of these high end homes fueled by low interest rates.
I doubt it.
How many such modest houses in your modest neighborhood are available now? How much has the housing supply in your town grown, and how much has the population grown? Are all these buyers actually making a direct choice between these two kinds of houses, or is only one of those choices actually available to buy?
In my zipcode +/- 10% of my home value... 30 or so....
>How much has the housing supply in your town grown, and how much has the population grown?
No idea on supply... We average about 1% population growth per year. Slight decrease during the pandemic, slight increase in the last couple of years.
In the same zip code there are 18 New Construction properties for sale, all 2 - 3x my home price. Which would not include the homes being built for buyers under contract.
Now saving 30% a year of a $78k income means you have to save for 20 years to have the full price of the house. ($480k), so you're forced to get a loan, and likely a much bigger loan
My grandfather immigrated to Australia in 1948, got a job assembling cars at the Ford plant, and worked there until he retired.
My Grandmother never worked. They bought a very nice house, had two boys, never really had any debt, plenty of money in retirement.
A generation later my Dad was earning $10k/year as a teacher, and my mum and dad bought their first very nice home for $30k.
So today how many people earning $100k/year can buy a home for $300k?
(As reference, my partner earns $78k/year and bought a modest home for $480k the month before covid. Now there is not a single home in this small town for less than $600k.)