re: The math for buying a home no longer works, per WSJ

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quote:
According to SSA.Gov, annual wage growth was 3.27% over 20 years.
According to your chart, annual home appreciation is 3.5%.

We have a 31 page thread because people want 0.23% annual difference to be categorized as "significant" and unlike any burden ever carried by a previous generation.

Thanks for the supporting chart by the way.


Average home cost in 2003 = $198,000
Average home cost in 2023 = $431,000

this is a 118% increase

Average wage in 2003 = $16/hr
Average wage in 2023 = $29/hr

this is a 81% increase

so, no its not 0.27% or whatever random number you keep mentioning, but the delta over the last 20 years bw average new home price and average wages is 36%

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There is conflicting data.
But let's use your numbers.
Over the last 20 years, home prices have averaged 4% annual growth.

Wage growth is 3.29%.

The gap is 0.71% per year over the 20 years.

That includes an uncommon 3 year run in home prices at 14% per year (which could falter in the near future depending upon unemployment).

So the argument is that home prices outpaced wages by 0.27% per year over 20 years.
Stretch that average out over 23 years and you are looking at closer to a 0.7% per year gap.

So there are the facts.
I don't know how any first time homebuyers do it (despite the fact that half of the home purchases last year were first time homebuyers).

God bless you all in your struggle. To expect or hope anything better is: