People like to point out that interest rates in 1981 topped out at 21.5% — which is pretty brutal.
But median home price in 1981 was $68,900 and median income was $22,390. So three years of income could pay for your home.
By 2024, median income had doubled, and is now $44,225. But the median home price is up 500% to $384,500. So it will take you about 9 years to pay for your home.
People who say “It was tough back in my day” do not understand the situation today.
Excellent post.
While today it may take about 9 years to pay for your home the associated costs of ownership (property taxes, utilities, insurance, maintenance, repairs, upgrades, etc.) are rapidly rising as well thus making a home purchase these days an even greater burden.
“By 2024, median income had doubled, and is now $44,225. But the median home price is up 500% to $384,500. So it will take you about 9 years to pay for your home.”
The below site shows medium household income going from $20k to $75k thus now the ratio is 5 years to pay off.
https://www.multpl.com/us-median-income/table/by-year
For 50+ years, wages have *never* kept up with home prices...