The average house sold in 1946 cost $5.25K. The median salary at the time was $3K.
The average house sold today costs $374K. The median salary is $51K.
You can argue that those houses that were sold back then were smaller, but they were also made of vastly better materials than modern home construction, and it's not like people even have the opportunity of buying those smaller homes unless they want to live in a slum.
A median is one such average. By wanting to know the mean or the range shows that you're trying to cherrypick the result you want.
> The average house sold in 1946 cost 1.75X. The median salary was X.
> The average house sold in 2022 cost 7.33Y. The median salary is Y.
Its clear from all the communications, unionizations, Great Resignation, and more that wages are completely broken.
And that above shows what it looks like.
We're one of the lucky ones. We're finalizing our recent house purchase. First time homebuyer. $375k , which was at the top of our budget. I make $150k, which is still a 2.5 factor differential... Which is .75 ABOVE what it would have been in the post-war boom 1946.
Im in my 40's, and its taken me 20+ years to actually get enough of a footing to even look at a proper house. I feel immensely sad for all younger. Can't afford a $600/mo mortgage so they're stuck with $1000 rents.
Loans are for people to borrow money when they don't need money.
> A median is one such average. By wanting to know the mean or the range shows that you're trying to cherrypick the result you want.
I think GP is just trying to make sure we're comparing apples to apples. To me it almost comes across as you cherry picking data (average house price vs median salary).
https://fred.stlouisfed.org/graph/?g=OBTh only has data for median house prices from 1963, and household income from the mid '80s. The spread growing isn't heartening.
While housing has indeed gotten more expensive you can't compare absolute prices.
First you're getting a vastly different product today than in 1946. Consumer demands are far higher too.
Also to compare affordability the metric for most people would be the median percentage case of mortgage payments vs the persons take home pay. When measured this way it's been hovering around 30% for the past 40 years in the UK.
> While housing has indeed gotten more expensive you can't compare absolute prices.
Horseshit. Homes built in 1946 are selling for millions of dollars, even if they're going to be torn down and rebuilt for marginal cost. You're not buying a house, you're buying the land and taking responsibility for everything on it.
And even then, the lumber you get out of such an old house is quite valuable virgin oldgrowth, a better quality product than you can buy at a lumber yard today.
And, to pick a nit... comparing the median income to median house price is an examination of relative price, not absolute.
In 1946 that house was in the styx with bugger all facilities and infrastructure about it. Fast forward 76 years of development and that house is now in the center of a large city full of facilities and opportunity.
To compare the 1946 houses location you need to pick something with the same level of amenity, which will be probably a country town.
The problem is that a cheaper house in the country no longer has jobs. Americans don't earn enough in average to afford to support local businesses, so every dollar made gets basically exported from the town to walmart or amazon.
That $150k house in the boonies, even if it was built yesterday, has less value, because the community it is in is in the process of dying and has no opportunity. That same house in the same town sold for $60k in 1989, while that very town was much more functional, alive, and happy than it is now.
>> First you're getting a vastly different product today than in 1946
Is that true? Something like 40% of the UK housing stock was built pre-WW2. Sure they’ll no longer have a coal bunker and they most likely have had insulation upgrades etc. but a pre-WW2 house in 1946 is still a pre-WW2 house today. The modern build will have less living space, predominately through smaller room sizes but should be cheaper to heat.
>> Also to compare affordability the metric for most people would be the median percentage case of mortgage payments vs the persons take home pay
That lops off all the people who can’t afford a mortgage so i dont think that logic works.
The data is inherently skewed. You only have a mortgage if you can afford the down payment in the first place and so of course it’ll follow the age old rule of 1/3 of your income. This doesn’t capture how housing supply hasn’t followed population growth/ all the people stuck paying rent in perpetuity.
You are likely getting lead free, asbestos free, central heating(cooling), double pane windows, vastly better insulation, more fire resistant, better and more appliances, and depending on locations things like: full basements, attached garages, screened in patio/porch, or pools.
>but they were also made of vastly better materials than modern home construction
No way this is even close to being true. Newer houses with all the advancements in materials and construction science are much better than the post-war garbage that was spewed out.
I made a small fortune in my early 20s fixing and renovating those post-war houses. They're almost universally junk in comparison.
The average house sold today costs $374K. The median salary is $51K.
You can argue that those houses that were sold back then were smaller, but they were also made of vastly better materials than modern home construction, and it's not like people even have the opportunity of buying those smaller homes unless they want to live in a slum.