[bluefirebrand]

Forget comparing old builds to new builds

If you look at the pricing trend of a single house, it tells quite a story

In my city, A house that would have been 80k in the 80s is listed between 500-600k today, depending on the neighborhood and how updated it is

In the 80s you could get a 15-20 year mortgage at 20%

Now you get a 30 year mortgage at 5%

If your monthly payment today is less than it would be at 20%, it is only because you are expected to be paying for it at least an extra 10 years compared to the past

There is absolutely no question that houses are less affordable today than they used to be

And that's before even thinking about how salaries haven't grown anywhere near as quickly as real estate prices

[tpmoney]

An 80k house in the 80’s means inflation alone accounts for ~$300k of the current sale price of the house. If the general area has built up at all in the last 40 years, that could account for a bunch more of that cost. Absolutely some areas and places are climbing way faster than their market wages are keeping up, but I also think a lot of housing discussion compares a house 1 hour outside of the nearest big city with that same house now in the middle of that expanded big city. Location matters a lot, and what is a great location now might well have been out in the sticks 40 years ago.

[chickenpotpie]

> Forget comparing old builds to new builds

Why? It's extremely relevant.

> In the 80s you could get a 15-20 year mortgage at 20%

20% was the rate for 30 year mortgage in the 1980s. My source is specifically for 30 year mortgages.

> If your monthly payment today is less than it would be at 20%, it is only because you are expected to be paying for it at least an extra 10 years compared to the past

That's a gross overgeneralization. Interest rates are lower across the board today.

> If your monthly payment today is less than it would be at 20%, it is only because you are expected to be paying for it at least an extra 10 years compared to the past

I never said they weren't but you also haven't provided any evidence that arent.

> And that's before even thinking about how salaries haven't grown anywhere near as quickly as real estate prices

You're literally just repeating your original claim with no new evidence.

[trod1234]

It really isn't relevant in the way that you think.

The fiscal cycle is a ponzi cycle following a ponzi curve this mirrors many areas including business growth S-curves.

In general that characteristically means benefits start front-loaded, they have a period of diminishment, and then at a point outflows exceed inflows where you have to pay back and keep paying more than you spent. The overall plan being by the third stage, you are dead and don't have to pay it back, or have been bought out and its someone else's problem.

Even with normalization of the price level it doesn't accurately reflect purchasing power well, and so you cannot really measure opportunity cost or make an accurate objective comparison.

This is the nature of fiat money distortions and why Mises was so against Socialism. In his works he defines the Economic Calculation Problem, or the Socialist Calculation Problem whichever you rather prefer. Sustaining chaotic distortions are ECP/SCP.

The nature of fiat/ponzi is that money printing in an economy debases exchange, extracting cost and forcing failures broadly to non-market socialism when that third stage happens.

This is reflected in a lack of employment, and no or gradually fewer businesses entering the market/industry. It acts like a sieve, with the money printer continuing even after no profit can be made (where regular business exits the market). It is a parasite that kills its host every time, but that is a problem for next quarter.

Distortions take many forms and they are chaotic and by that nature they unknowable in detail specifically and unpredictable. Artificial Supply Constraint to raise price level is one such form.

Often there are whipsaw dynamics between opposing constraints, with diminishing returns required to remain stable. A cliffside with drop-offs on either side as you approach, and you can only march forward into the ocean. At first there is a minor safe path, but eventually it converges. Hysteresis can be an impossible to solve problem without being able to change the underlying system.

Price levels being suppressed (such as Gold/Silver/Food). Price discovery being manipulated (dark pool transactions exceeding exchange volume). These are signs of chaotic distortions caused by money printing.

Economic calculation requires price discovery, which requires adversarial decision-making. Cooperative behaviors naturally occur when there are few participants. The distortions injected through the money supply have knowable (in general) dynamics and outcomes.

Its important to remember that Price != Purchasing Power. Wage suppression is also a real thing and its fueled by the same.

[daveguy]

On the bright side, at least it's not as big of a ponzi scheme as crypto.