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232 sats \ 8 replies \ @Undisciplined 11h \ parent \ on: "Housing prices are not high by any historical standard" - evoskuil econ
It's a bit like saying a ladder is easier to climb because the top rungs are closer together, while omitting that the bottom rungs have been removed.
I don't fall cleanly on one side of this or the other. I think it's true that people's expectations have outpaced their means, to some degree, and they interpret that as things being less affordable. At the same time, when they say "A sole earner could afford a house and a car.", they leave out the lower quality of those things.
My beef is with the absoluteness of the claim. Clearly, there are some historical standards by which housing is less affordable than it used to be. One popular metric is to show how high median home prices have become relative to median wages. That metric has all kinds of potential problems, but it is definitely a historical standard.
a ladder is easier to climb because the top rungs are closer together, while omitting that the bottom rungs have been removed
I'm not sure I get how your analogy works. I'm inclined to agree with Voskuil, and I'd say that there is a lot of evidence that the ladder hasn't changed that much.
Here's a different angle on it:
If housing was significantly more expensive, we might imagine that it would begin to show up as a higher percentage of people's expenditures. I suppose it might be the case that people are not willing/able to spend any more on housing and so are downgrading, but I don't think that's true.
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That's an aggregate across all age ranges, and the population is getting older.
For people 25-40, the housing component is probably growing more than the healthcare component (my guess)
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This is using data from Bureau of Labor and Statistics. I'm a little unsure about it though, because some of the data points seem off (why does 55-64 have such a big jump in 2023? What's up with the 75+ spike in 1995? -- I used chat to create it...)
Anyhow, it seems to show that housing as a share of total expenditures stayed flat for most age buckets during the 2010s, but was rising before that? Curious what you think of it.
(it doesn't address @Undisciplined's points about household composition though...)
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It's hard to take too much away from that. The blue line contains most first time home buyers and it is growing more than some of the others, but less than red and not really differently than purple.
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Did you look at the underlying data too or did you just ask chat to create it? Seems off to me
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just asked chat.
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That's share of household expenditures, though, not per capita expenditures. Young adults live at home, in dorms, or with roommates later into life than they used to.
Without accounting for household composition, you can't conclude too much from that graph.
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It's a bit like saying a ladder is easier to climb because the top rungs are closer together, while omitting that the bottom rungs have been removed.
Great analogy, and really apt for the kinds of arguments often being made by the "everything-is-fine" crowd.
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