I saw a lot of people in the trades barely scraping by 5-7 years ago when housing was bottoming out. Housing stock is growing at something like 3x population growth in the US right now. A few more years of that and they may be back in the same situation. Being employed in a heavily cyclical industry definitely has rich years, but it's also got lean ones.
However the housing stock grows, the remaining stock needs maintenance anyway.
So, well, indeed, a good plumber should not see extremely lean years.
(Anecdotally, my son works as a building systems maintenance engineer, without a college diploma. Of course the market for such jobs ebbs and flows, but seems to never dry up: city buildings still need their elevators, HVAC, fire alarm, access control, etc systems working, no matter what.)
Housing starts are at ~1.7MM units/year right now, that's enough for about 4.5MM people at current household sizes. US population growth was 1.6M in 2019 and <1MM in 2020. Even with generous estimates on losses of existing housing, I don't think 3x is appreciably off.
Maybe it has something to do with the fact that more than half of the younger generation are currently living with parents [1]. Not because they necessarily enjoy it, but because they can't afford their own home.
Building more housing should lower the effective price of it, and allow many new home buyers or renters to enter the market.
A lot of the construction boom is probably attributable to the new found geographic freedom COVID gave, coupled with the low interest rates from the Fed's monetary policy. There was a sudden mismatch of locale supply and demand. Housing starts were also quite low over much of the last decade, definitely below the equilibration point for 2019-2013.
It'll be interesting to see how things play out. I think the shift of older millennials out of cities combined with the relatively smaller generation replacing them will likely cause a reversal of a lot of the urban price growth in the past decade in places like New York. Rents are already reflecting that, but sales prices have more hysteresis.
I've read since 2008 LA has added 5 jobs for every new unit of housing. I'm sure other places in CA must be just as bad with how they've been building for the past decade. It feels like we are so far in the hole in many cities, I'm not sure how much overbuilding it would take to right the ship and make housing affordable to the median wage earner again.
When GP said business owners I assume they included independent plumbers. I can call the local plumbing franchise and I will pay $150/hr, but the person who shows up at my door is not making anywhere near that.
My friend works for a home security company. They bill $150/hr for labor and he makes $26/hr.
Compared to other countries, Australia is an outlier for tradesmen income, by far. The closest comparison I can think of is software engineer income in the US vs everywhere else.
Working in a trade in Australia is lucrative AF, if you're looking for a way to be relatively wealthy only a couple of years out of high school, apprentice as a shipwright, elevator technician or HVAC technician.
That may not be a lot of money wherever you live, but a married couple both making close to that are borderline rich where I live. A single person making that is above middle class. Of course a nice house can also be had for $150k.
And yeah, my carpenter got his HVAC, electrician, and plumbing licenses in prison and now runs his own business with family members and makes a lot more than I do, but it wasn't by luck or fortune. Anyone could have done what he did (skipping the prison part), if they didn't mind working hard.
That's not a lot of money, period, considering the hours and the inflation due to overtime. Consider too that that is the median - many are making far below that.
Most people making money in trades make most of it working more than 40 hours a week, or, like you said, runs his own business (which is completely different. That is no longer a "carpenter" plying his trade.)
> Anyone could have done what he did (skipping the prison part), if they didn't mind working hard.
This is just not true and stated as fact. There is no evidence of this. We have no idea how capable this man really is. I know lots of dumb tradesmen and lots of brilliant ones. He should be proud of what he's done because it isn't as easy as you say.
Overall that doesn't make much difference. The bottom decile of business owners makes much less and the top decile makes much more. The majority in the middle makes about the same as they would if they were an employee.
Part of that change is artificial. Mortgage interest rates have plummeted, which have caused prices to go up. The real median mortgage payment is about the same over the last 50 years.
This, unfortunately, also implies an explosion of interest rate risk. Given a fixed monthly payment, I'd much rather be paying it at high rates that have a good chance of dropping, than at low rates that have a good chance at rising.
Edit: Thank you, Americans, for your perspective! I understand now that you have fixed rate mortgages there. That's, for better or worse, not the case in Canada!
Ah, my perspective is coming from Canada where every mortgage is variable rate. ("Fixed rate" mortgages are only locked in for five years).
One would think that would cause US real estate to appreciate much faster than Canada when rates are low, but the opposite is the case. Strange days indeed.
* In Canada you technically can get a 25 year fixed mortgage, but the interest rate is 8.75%. That's a massive premium and I've never heard of anyone doing that.
If you want your monthly payments to be low initially, and you intend to pay off the mortgage debt fully within 5 or 7 years, then a 5/1 or 7/1 ARM can be a good option.
I don't understand this allergy towards debt. Oh no, people had the option to take out a loan to access capital they wanted to invest in themselves. If only we could be like the Europeans instead and waste public money to fund whatever stupid whimsy someone fancied rather than make them responsible for the productivity of their choice.