Home Price to Income Ratio (longtermtrends.net)

Article summary

The article discusses the home price to income ratio in the US, which has historically been around 5 times the yearly median household income but exceeded 7 during the housing bubble of 2006. The ratio is calculated using the S&P/Case-Shiller Home Price Index and median household income data. The article also touches on the importance of considering mortgage rates when assessing affordability. The current data suggests that home prices have become less affordable, leading to a decline in real home prices.

Main themes

• housing affordability
• home price to income ratio
• mortgage rates
• rent control
• wage growth
• inflation
• property rights
• housing supply

What commenters say

• Some argue that the home payment to income ratio is a more accurate measure of affordability than the home price to income ratio.
• Others suggest that inflation is a critical factor in the increasing home price to income ratio, and that wage growth has not kept pace with inflation.
• Rent control is seen as a potential solution to the affordability crisis, but others argue that it can lead to distortions in the market and decreased housing supply.
• Increasing wages is proposed as a possible solution to the affordability crisis, but others argue that this would simply lead to higher housing prices.
• Some commenters argue that the solution to the housing affordability crisis lies in increasing the supply of housing, rather than controlling prices or rents.
• Others propose exploring alternative policies, such as longer notices for rent increases or requiring multi-year lease options, as a more feasible solution.
• The role of property rights and their potential limitation as a means to increase freedom and affordability is also discussed.
• The impact of mortgage interest rates and the potential for negative rates on the housing market is also considered.