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Comment by CharlieDigital | Hacker News Reader

Where I live, many of the houses were built by the same builder or at least using the same basic plan (I've even seen houses built 20 years later than mine with the same basic layout).

My wife and I purchased in 2015. A short bit after, there was some regret as prices were still falling.

I recently went to pick up my child at a classmate's house. They just purchased last year. I walked in and, sure enough, roughly the same house with minor differences in the layout...except it cost $300,000+ more.

Not sure how my kids are ever going to own a house in the US and I feel like I am locked into this house and mortgage forever.

In retrospect, we purchased near the bottom. Truly some generational "luck".

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> I feel like I am locked into this house and mortgage forever.

Same.

We bought in Dec 2017, and were really conservative in choosing a home that we could easily afford - it was less than my annual income, on a half acre. It's five bedrooms but we really need more storage and just more "space" in general.

We don't plan to sell it in the foreseeable future. Even if we could find the home and property that we want, it just makes no sense. It would be a better financial decision to use the equity as a down payment on our next home and rent this one. Given that home prices have doubled since we bought, renting it at market rates here would pay for our existing mortgage, an equity loan, and ~$400 of positive cashflow per month.

> Not sure how my kids are ever going to own a house in the US

(EDIT: Inverse of) Median income to the average house price, across America, is at its highest point since the 80s (when we started measuring) [1].

[1] https://fred.stlouisfed.org/graph/?g=coAW

You dropped the 1/

    1/(Median Household Income in the United States/All-Transactions House Price Index for the United States)

Sorry, yes. Meant to say we're at our most unaffordable since just before the financial crisis.

thank you, I was really confused by the chart. It's kind of odd that you would use 1 as a nominator.

both indexes next to each other are maybe more intuitive: https://fred.stlouisfed.org/graph/?g=1jzxK

EDIT: due to a missing 1/ in the parent I think i was arguing against the opposite of what the parent poster meant to convey, heh.

But that doesn't account for mortgage rates, or competition in down payments right?

If you make 5% more inflation adjusted than the person 5 years ago, but mortgage rates are 2x, than you're still way behind right?

And if all those who bought starter houses 5 years ago have a ton of equity to drop in the down payment to trade up, you might not even be able to buy a house where you can afford the monthly mortgage payment.

You might not be able to trade up? Oh, the horror.

Imagine not owning a home, not being able to afford a home, and having both rent and house prices accelerate faster than wages.

Shouldn’t that be compared to the median house price instead of the average?

Why? Not everybody has a house. A house going for the median price is going to be purchased by someone well above the median income.

> Not everybody has a house.

I’m pretty sure that’s correlated to income.

> A house going for the median price is going to be purchased by someone well above the median income.

Which proves the point?

What are you trying to achieve by looking at the median house price?

Price is only part of the story, what about in the mid 80s when the house was $105k but interest rates were double digits? I'm curious what kind of buying power the average household needed back then and how that compares to today.

> it cost $300,000+ more.

Have you try to inflation-adjust that? You may find the price jump is not that great for the last ~10 years.

It's well, well above the rate of inflation.

Official inflation from 2015 to 2024 was around 33%. If the house cost 1mil, then the entire appreciation of 300k was due to inflation. If the house cost 500k - over half of the appreciation was due to inflation.

In order for inflation alone to account for $300,000 delta in value they'd be spending so much on these houses that they would be fine financially by almost any metric.

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