September 2022: Median US home price $414,000

[ua_guy]

..According to the National Association of Realtors.

Discuss!

Seems outrageous to me, given the price is median for the entire country. Where I live, median is $900k even, which is astronomically high in comparison. I don't know how young people do it. Most of them don't.

[james.hendrickson]

Interesting comment UA_Guy. At one point I recall seeing a talk from Senator Elizabeth Warren, back when she was an academic, looking at family adaptation to high housing and health care costs. What the presentation basically noted was that in response to increasing housing and health care costs, both partners in a family needed to engage in the labor force to cover the rising real costs of housing and medical care.
What
Its not clear to me what the next family adaptation will be.

[Fishindude77]

The really high priced areas such as California really skew this number upward. Also, peoples needs / wants have risen dramatically in the last couple decades regarding what they want in a home.
Can buy lots of very nice suburban homes in my region for $250k and under.

There are also still plenty of sub $100k houses available all over the country. Might be a bit more rural or less cultural than many would like, but they are out there, and there are decent jobs in those areas.
Still lots of opportunity for someone willing to buy a fixer upper and improve it themselves as well.

[LivingAlmostLarge]

The really high priced areas such as California really skew this number upward. Also, peoples needs / wants have risen dramatically in the last couple decades regarding what they want in a home.
Can buy lots of very nice suburban homes in my region for $250k and under.

There are also still plenty of sub $100k houses available all over the country. Might be a bit more rural or less cultural than many would like, but they are out there, and there are decent jobs in those areas.
Still lots of opportunity for someone willing to buy a fixer upper and improve it themselves as well.

I heard that even in midwest it's been a bit insane how homes have escalated because of covid and now inflation. Maybe the coasts skew it a little but people also buy at a much lower rate too on the coasts and a lot buy condos/townhouses.

[bjl584]

I bought my house in 2016 for $155K. It was a fixer upper, and I put maybe 10K into it, as I did most of the work myself.

I'm thankful that I bought before all the craziness started.
My home has tripled in value, and it would be out of my price range if I were house hunting today.

[ua_guy]

In different threads we keep hitting on inflation, causes of inflation. But the cost of housing doesn't really seem to factor into those discussions. Why not?

[disneysteve]

In different threads we keep hitting on inflation, causes of inflation. But the cost of housing doesn't really seem to factor into those discussions. Why not?

Housing costs are not included in the CPI because that focuses on consumption. So if housing prices are up or down doesn't play into the official inflation rate.

[ua_guy]

Housing costs are not included in the CPI because that focuses on consumption. So if housing prices are up or down doesn't play into the official inflation rate.

That's a good point, and maybe one reason why it gets left out of discussion. But...I am willing to believe the rising cost of housing is directly related to rising prices, rising wages, etc. People simply need more money to cover the cost of living.

[Petunia 100]

..According to the National Association of Realtors.

Discuss!

Seems outrageous to me, given the price is median for the entire country. Where I live, median is $900k even, which is astronomically high in comparison. I don't know how young people do it. Most of them don't.

My young people (daughter and son-in-law, son and daughter-in-law) did it by moving half way across the country to an area with affordable homes available. I sure do miss them. When I retire, I will join them.

[riverwed070707]

I heard that even in midwest it's been a bit insane how homes have escalated because of covid and now inflation. Maybe the coasts skew it a little but people also buy at a much lower rate too on the coasts and a lot buy condos/townhouses.

Can confirm. I'm as midwest as it gets in Iowa and while I agree with Fishindude that peoples expectations of housing has expanded (ie master bedrooms, big closets, multiple full bathrooms tend to be non-negotiables for "middle class" families these days), you cannot purchase homes here for less than $100k anymore when they used to be plentiful and move-in ready homes start at $220k. That is a HUGE gap compared to our average wage of less than $50k. Couple recent personal examples:

House 1 - 3 br, 2 full bath, story and a half with a single car garage in a C neighborhood of a metro area. Purchased in 2017 for $115k, sold in 2022 for $185k with minimal updates

House 2 - 3 br, 1.5 bath, 2 story and 2 car garage in a B neighborhood but same school district as previous home. Purchased in 2019 for $226k, recent comps are $300k. Couple that with the current interest rates and I couldn't buy my own home today.

This is considered a LCOL area and my wages haven't increased since I bought the original home in 2017...they are completely stagnant, if not declining. Couple that with the fact that property taxes have increased, utilities have increased, internet cost has increased, car prices are insane(!), food prices are through the roof (hello $6/lb ground beef vs $1.99/lb a few years ago - we barely eat meat anymore) and insurance rates doubling as well. I feel like I've essentially gone from living comfortably to back to needing to budget every dollar - if it weren't for my rental properties, I'd be in the red.

[ua_guy]

My young people (daughter and son-in-law, son and daughter-in-law) did it by moving half way across the country to an area with affordable homes available. I sure do miss them. When I retire, I will join them.

We experienced something similar for a job move that took us from the West Coast to the Midwest. Even with quickly rising prices in popular areas of the Midwest, homes are shockingly affordable compared to other areas of the country. And that translates to a very different social landscape as well--although speaking in broad generality, the pace of life felt slower and more intentional there. Those differences were refreshing. Even though wages are a bit less, I think the Midwest is a place where "value" (a delta between wages and the cost of living) is still high.

[jenn_jenn]

My young people (daughter and son-in-law, son and daughter-in-law) did it by moving half way across the country to an area with affordable homes available. I sure do miss them. When I retire, I will join them.

I’m kind of young at 31. My husband and I moved completely across the country. We sought higher wages rather than more affordable housing. The higher wages made expensive housing more affordable

I’ve mentioned it before but I had a really hard time with the move. I still hate where we live and I don’t think it’s easy but it’s what we needed to do to set ourselves up for success. I am counting down the days until we can move home. I’m praying that it’s “only” 5 more years.

Even then, I thank our lucky stars we bought in 2020. If we were to be purchasing today, it’d be prohibitively expensive.

Unless wages increase, I don’t think the current home prices are sustainable. However, I think we’re going to start seeing a wage-price spiral.

[ua_guy]

US Mortgage interest rates are up to 7.16%

Holy smokes.

[Petunia 100]

I’m kind of young at 31. My husband and I moved completely across the country. We sought higher wages rather than more affordable housing. The higher wages made expensive housing more affordable

I’ve mentioned it before but I had a really hard time with the move. I still hate where we live and I don’t think it’s easy but it’s what we needed to do to set ourselves up for success. I am counting down the days until we can move home. I’m praying that it’s “only” 5 more years.

Even then, I thank our lucky stars we bought in 2020. If we were to be purchasing today, it’d be prohibitively expensive.

Unless wages increase, I don’t think the current home prices are sustainable. However, I think we’re going to start seeing a wage-price spiral.

Home buyers used to primarily be people. Now a lot of homes are being purchased by corporations. I personally think the US housing market is currently undergoing a big shift and won't be shifting back.

[james.hendrickson]

US Mortgage interest rates are up to 7.16%

Holy smokes.

Yep - and the fed is going to raise rates again on the 2nd of November when they meet.