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PhiTiger1764
LSU Fan
Lurker since Aug 2003
Member since Oct 2009
13195 posts

Home Price to income ratio peaked in May

quote:

Historically, an average house in the U.S. cost around 5 times the yearly household income. During the housing bubble of 2006 the ratio exceeded 7 - in other words, an average single family house in the United States cost more than 7 times the U.S. median annual household income.

The Case-Shiller Home Price Index seeks to measure the price level of existing single family homes in the United States. Based on the pioneering research of Robert J. Shiller and Karl E. Case the index is generally considered the leading measure of U.S. residential real estate prices.


LINK



The home price to median household income ratio reached 7.78 in May, it then retracted to 7.76 in June.

For reference, this ratio peaked at 7.03 in November 2005. It reached that number again in October 2021 and had been setting new all time highs each month.. until now.

And by now I mean June 2022. The data lags by a few months.


brewhan davey
USA Fan
Audubon Place
Member since Sep 2010
31876 posts

It's crazy. We bought our house in May of 2019 and haven't done any renovations. Our realtor said he would list it now for $150k more than what we paid for it in 2019.


GetCocky11
South Carolina Fan
Truth or Consequences, NM
Member since Oct 2012
47792 posts

Yeah I look around and don't understand how people afford the shite they have.


Mingo Was His NameO
LSU Fan
Brooklyn
Member since Mar 2016
25455 posts

quote:

Historically, an average house in the U.S. cost around 5 times the yearly household income.


Jesus, I'd be house poor


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64
lnomm34
LSU Fan
Louisiana
Member since Oct 2009
12192 posts
 Online 

What are all of those periodic steep drop offs throughout?


Solo Cam
USA Fan
Member since Sep 2015
29119 posts

quote:

It's crazy. We bought our house in May of 2019 and haven't done any renovations. Our realtor said he would list it now for $150k more than what we paid for it in 2019.
unless you live in central florida or Austin Texas that's not the case anymore bud. Maybe it was earlier this year but pricing are dropping like crazy now


brewhan davey
USA Fan
Audubon Place
Member since Sep 2010
31876 posts

quote:

unless you live in central florida or Austin Texas that's not the case anymore bud. Maybe it was earlier this year but pricing are dropping like crazy now


Yeah I started noticing that around here (Nola). Should have jumped on it while we had the chance.


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41
BenDover
SMU Fan
Member since Jul 2010
5230 posts

quote:

Historically, an average house in the U.S. cost around 5 times the yearly household income


I know the sentiment of the article is that 7x is too high but even 5x seems way too much. Wife and I's home cost 2.5x our combined income and, when factoring in property taxes + insurance, that seems like it'd be near my max.


PhiTiger1764
LSU Fan
Lurker since Aug 2003
Member since Oct 2009
13195 posts

quote:

What are all of those periodic steep drop offs throughout?

It looks like these drop offs are typically from Nov/Dec to Jan. So maybe seasonal adjustments due to low buyer interest during the holidays? Just guessing…


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20
MikeBRLA
LSU Fan
Baton Rouge
Member since Jun 2005
15280 posts

quote:

Historically, an average house in the U.S. cost around 5 times the yearly household income.


Damn… I’m at about 2X gross income. I couldn’t imagine being at 5X.


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50
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USA
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GetCocky11
South Carolina Fan
Truth or Consequences, NM
Member since Oct 2012
47792 posts

quote:

I know the sentiment of the article is that 7x is too high but even 5x seems way too much.


Most of us live on the edge with monthly expenses with zero buffer.


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60
PhiTiger1764
LSU Fan
Lurker since Aug 2003
Member since Oct 2009
13195 posts

quote:

I know the sentiment of the article is that 7x is too high but even 5x seems way too much.

I think it’s just a way to view the data . 5x is obviously way too high. But they are comparing median income to average house price, so I’d expect it to still appear high even in a normal market.


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20
Aubie Spr96
Utah Fan
lolwut?
Member since Dec 2009
37823 posts
 Online 

quote:

Yeah I look around and don't understand how people afford the shite they have.




I say this shite all the time. People must make WAY more money then I think they do......


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80
The Third Leg
Iowa Fan
Idiot Out Wandering Around
Member since May 2014
9058 posts

Outside of being strapped and not building out an investment portfolio, I don’t know how people do it. We went 1x annual earnings in 2015 and I often feel poor.


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110
metallica81788
LSU Fan
BR
Member since Sep 2008
6800 posts

Answer: Credit card debt for everything


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60
TH03
Iowa State Fan
Mogadishu
Member since Dec 2008
169618 posts

it felt really good to close at around 2:1 with a great rate right before they started rising.


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51
Areddishfish
Wright St. Fan
The Wild West
Member since Oct 2015
5208 posts

In the 1950s and 1960s you could build your own house for at most double your salary.


Weekend Warrior79
LSU Fan
Member since Aug 2014
12331 posts
 Online 

quote:

Yeah I look around and don't understand how people afford the shite they have.

Being involved with payroll/HR duties for several years, I learned that people will always sacrifice the future so they can live the life they want to know. Way too many people do not save for retirement, don't save for vacations, the inevitable big expense... They take out loans, and as soon as that loan is paid off; they are getting another loan.

Hell, at one point 20% of the people with 401k plans at my company had a 401k loan. 1 was for a down payment on a house, 2 were for cars, the other were for random large expenditures or help "catching up" with daily expenses.


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Jcorye1
Detroit Mercy Fan
Tom Brady = GoAT
Member since Dec 2007
66652 posts

Absolutely insane. I would never buy a million dollar house because our household income is above 230k.


The Third Leg
Iowa Fan
Idiot Out Wandering Around
Member since May 2014
9058 posts

quote:

In the 1950s and 1960s you could build your own house for at most double your salary.

Ah, the 50s — back when the second bathroom was a sign of prosperity


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