In 1970, a US couple might have an “imaginarily fair” claim on 1/100Mth of America.
Now, that same age couple might only have a claim on about 1/167Mth of America. That’s about 40% less land or share of other inherently-constrained resources per American. Other countries have had more pressure on their populations.
It’s no surprise that “buying a big lot with a freestanding house” was a lot more attainable when there were 40% fewer people chasing that dream. Part of it is inescapable math.
Inflation adjusted housing prices were basically steady from 1950 to 2000. Yet the US population went from 150 million to 300 million.
It is surprising that for most of the 20th century housing was very affordable and then something changed in the late 20th century that culminated in two housing disasters in the 21st (the first is the housing crash and now a housing market that basically excludes all but the rich).
With interest rates consistently over 7% and sometimes over 16%, a simple price chart doesn’t tell the full affordability story.
When rates fall under 4%, house prices will naturally be higher in desirable areas because a lot of buyers are buying on monthly payment, not headline purchase price. Cheaper mortgages make for more expensive houses.
You said that the size of the population determines housing cost.
Now, when I showed you this is totally wrong, beyond any doubt, you changed the story. Now it's the interest rates that determine housing cost.
This is like trying to have a discussion with an antivaxer. No matter what they say, you prove them wrong, and then they change their story, pretending like the nonsense they said before never existed.
Look up a chart of mortgage rates. You're still wrong. Bye!
Huh, I never thought about it this way. I'm not 100% convinced this is valid math, but I can't find any obvious fault with it. Thanks, I have something to think through.
EDIT: in the 50 years since 1970s the US economy wasn't still - technology made huge leaps across all industries, and lots of wealth has been created. One would think this would offset the population growth, but it seems that it didn't.
Yeah, but people aren't satisfied with just any land. They want the same land everybody else wants in the big cities. They want to be near the population center, but the land there was already relatively filled back then. The computation naturally pushes the prices up to levels that most cannot afford it.
This makes housing into a lucrative investment, which probably drives prices up even further. Nobody wants to see the value of their investment fall, so they fight against anything nearby that would decrease it (NIMBY).
Now, that same age couple might only have a claim on about 1/167Mth of America. That’s about 40% less land or share of other inherently-constrained resources per American. Other countries have had more pressure on their populations.
It’s no surprise that “buying a big lot with a freestanding house” was a lot more attainable when there were 40% fewer people chasing that dream. Part of it is inescapable math.