It really is not. I’m not saying there are no other economic challenges, but the vast majority of housing costs are effectively caused by this.
Here:
The median home price in 1960 was around 20,000. In inflation adjusted 2020 dollars that would have been close to 200,000.
This puts the price per square foot prices within the $100-150 range.
In 2020, the price per square foot was in the same range.
Wages have remained largely static. To be clear, this is NOT a good thing as productivity has skyrocketed, but is beside the point for now.
Effectively, the reason why people cannot afford a mortgage is massively influenced by the average size of home.
Cars make this fact even worse. On the mid to low income side of the economic spectrum, car ownership can easily cost 30% of household spending. A two car garage easily adds 10%+ to home costs.
Hm, you know, you’re right, that’s a fairer point than I expected. I think what I hadn’t appreciated (but do now, after thinking through your reply) was how much “back-pressure” the new home construction puts on the market. The current median house price is about double that 200k-equivalent figure, and while the growth in median house size doesn’t directly account for all of that, the availability of new houses is effectively throttled by the size increase so the prices of all houses rise.
I think it was hard for me to imagine, because I have a fairly small house (1800 sq. ft) bought recently, no garage, built in the 50s, oil heating (very old), and it was 600k. Which is massively expensive compared to 200k and has none of the “big excessive new house” traits you’ve mentioned. Median is median, though, I suppose.
