House prices are so inflated over the last five years or so, that the ability to purchase (not inherit) a home is well beyond a huge number of citizens and is likely going to get even worse. It is nearly impossible to “save up for the down payment,” with the costs of how escalating, the increase in interest rates, general inflation and the near stagnation of wages.
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Yup. The mathematics of large numbers says with high enough inflation, or *ahem* “low” inflation of 2% (which will just take longer to destroy everything), Your wages increasing with inflation will not keep up with housing prices increasing with inflation.
That 5% increase, if one is so lucky, on a median salary of 70,000 is a net gain of $3,500. A 5% increase on a median $450,000 home is $22,500. 20% of that (for a hypothetical downpayment) is $5,000. So even if one was able to take *all* of their salary increase (forget about rising food and fuel) and put it toward a house downpayment, you end up falling behind. The house price downpayment amount will accend faster than you can save.
Of course games can be played for awhile, like lowering the percentage of the downpayment and extending mortgages to 40 years (buy when you’re 30, retire mortgage at 70), but eventually the gimmicks run out.
Correction: 20% of $22,500 is $4,500 and not $5,000, but the potential buyer is still on the wrong side of the equation. They cannot catch up to the rising prices.
That’s the math and math never lies . . .
“House prices are so inflated”
This is backwards. Housing prices aren’t “inflated”. There is a shortage of housing.