re: 1955 house ad: $7450 for 3B 1B

I found the paperwork from my grandfathers house. Downtown Thibodaux, 5 BR, 2.5 Bath, 2 story house - $2,850. This was in 1939.

I bought a house from a relative just before it was sold as a foreclosure in 1989. It had a $35K assumable VA mortgage on it with about $30K left. I paid the delinquent portion, about $3500, and assumed the rest of the 30 fixed rate mortgage (about 10% interest I think). Payment was about $450 a month best I remember. I was 23 years old at the time. My girlfriend and I ( now my wife) lived in that house for nearly 8 years. The first year we spent about $10k on remodeling it....did everything ourselves. It was just over 900 square feet. 2 Bedroom, 1 bath. Had a single car carport which had been enclosed and turned into a den. When I bought it the washer and dryer was in the kitchen and had fallen through the water damaged floor and into the crawlspace. We remodeled it again just before selling it in 1997 for $65k. It was on the market for about 15 minutes before we had an offer on it....it was priced below market value LOL. Probably was worth closer to $80k but we were very happy to get $65k for it. Bought a 2400 square foot 3/2 on 7 acres outside of Athens for $135K I think....I know everyone in our family thought we had lost our minds buying a $135k house....

That first house would be about $90K when adjusted for inflation today. It is appraised for tax purposes at just under $220k. That $135K house would be about $265K today. That house just sold for $695k. Housing prices are outlandishly higher than earnings....young folks have a very valid point, it is FAR harder to buy a house and start building wealth today than it was just 40 years ago.

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I mean, that statement is just incorrect.

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No, it isn't incorrect. But, the fact you (like many others) think so, is illuminating.

For example, the assumption being floated is that the current ~6.4% 30-yr mortgage rates are very high. Compared to where rates were for the last decade, that is absolutely correct. Buyers are paying far more in monthly notes than they paid just 3 1/2 yrs ago. That's hard! It sucks! For those who could have purchased in 2021, but chose not to, it is what it is.

However, comparing current rates to historical norms, i.e., rates inherent in these intergenerational discussions, the present ~6.4% 30-yr offerings are lower than at virtually any point from the late-1960's to 2000. From 1970-2000 mortgage rates ranged from lows at 6.8% to highs of 18.6%.

What's the difference?
Well on a $300K note at 6.4%, monthly payments are ~$1900.
On a $300K note at 18%, monthly payments would run ~$4500, for the same house. That's important when looking at historic home purchase costs.

Another requisite point of of apples-to-apples comparison is size and construction quality.
In that regard, the OP is a flat out joke. I seriously doubt there is a poster in this thread who'd live in the unairconditioned tool-shed home cited by the OP. It is no more than 15ftx30ft! Yet that's what 1950's families were buying.

Just fyi, 450sq-ft at $7450 amounts to ~$200/sq-ft in 2025 dollars. Meanwhile, new homes today are 2400sq-ft at ~$420K at $187/sq-ft.

Look, I'm not saying anyone has an easy go. But the "things have never been worse" yarn is simply bullshite.

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Last week, in a similar thread, someone posted this:
"I’d rather pay 16% on a 56k mortgage (in 1980) vs 6% on a 340k mortgage (today)."

It's the kind of expressed perception of "the obvious" that gets disassembled under examination.

Take a closer look at 16% on a 56k mortgage in 1980 dollars vs 6% on a 340k mortgage in today's dollars ....

$1 in 1980 = $3.80 today
$56K in 1980 = $213K today

A 6% 30yr on $340K would run $2040/mo
A16% 30yr on $213K would run $2870/mo

So the poster was claiming he would rather pay 140% more per month for 63% of market value. Frankly, it's not very dissimilar to posts here.

My first house was $55,000. I was making $5.50/hr. Man, it was rough. After 8 years of marriage lost everything. Now I’m broke. Tell me how great I have it now.

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I cut out avocado toast and bought 3 rental properties as a result

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I know it's a tongue in cheek reference but why does avocado toast catch the stray bullets that it does? Come to think of it, I've pretty much never seen someone eating avocado toast. I know they do somewhere, I've just never seen it.

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I know it's a tongue in cheek reference but why does avocado toast catch the stray bullets that it does? Come to think of it, I've pretty much never seen someone eating avocado toast. I know they do somewhere, I've just never seen it.

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Because it’s vastly different than what 99% of people grew up eating, it’s marketed as healthy, and incredibly marked up at modern, healthy restaurants

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Because it’s vastly different than what 99% of people grew up eating, it’s marketed as healthy, and incredibly marked up at modern, healthy restaurants

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I understand that, I'm not saying it isn't expensive. I'm saying I've never one time seen a server bring a plate of avocado toast to a table near me.

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The data doesn't agree with you.

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That's an odd article.
It appears they're double dipping on CPI and insinuating CPI covers things it doesn't?

CPI (Consumer Price Index) is primarily designed to measure inflation — specifically, the rate at which the prices of a "basket" of goods and services rise over time for urban consumers. It basically is inflation. So "adjusting it for inflation" doesn't really make sense.

Further, one has to be careful associating CPI with PPP over time. There are many things it does not capture. One example is home size ... not captured. Another is mortgage cost/rates ... not captured. A third is technology and tech deflation (the cost of a rotor phone in 1970 vs an inexpensive cell phone today, cost of TV's, computer capacity cost, cars that last 15yrs instead of 5yr functional expectancy in 1970, etc) ... not captured.

Addressing "the data" was what was done earlier -- income vs home mortgage cost per sq-ft at points in time. Your link whiffs on that apples-to-apples measure.

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I'm confused as to how one could simultaneously hold the view that our economic policy and printing of money has been anything short of criminal and then turn around and tell people "suck it up"

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Those two thoughts are only as related fiscal dominance (aka the fiscal cliff) ties them.

Economic policy and printing of money
When (if) the Fed hits a point where treasury auctions fail to meet targets in debt management, our economic situation will look something like a prolonged 1981 --- recession combined with skyrocketing interest rates.

That is the concern with our economic policy and money printing. As c-of-c for our debt resets toward present 4.5% rates (~$1.7 trillion/yr), it becomes a self-propagating malignancy. We can bring in $1.5 trillion/y more in tax revenue than we are spending on public service budgeting (DOD, SS, CMS, HHS, etc) and still our debt would increase at $2 trillion/decade. Those costs have been significantly mitigated so far.

When they hit, as they eventually will, those without substantial proportions of fungible assets will get financially massacred. THAT will be criminal.

"Suck it up"
"Suck it up" really isn't my attitude. No more so than it would be when a generation of aeronautical engineers lost their jobs after the NASA moon program was terminated, or concerning hippie hardship getting drafted to go get shot up in Vietnam. But American exceptionalism is about perseverance not prostration. There are always challenges. So while I'd not say "suck it up," I'm not tolerant of a "woe-is-me" can't-do approach either. When I see bullshite like the OP, I'm not empathetic.