40% of Americans have negative net income

[Final-Fan]

Baalzamon said:

SpokenTruth said:

It most certainly is a problem.  I'll give a simple example.  My father in law bought their house brand new in 1991 for $90k.  That same house is now valued at $270k.  Did wages increase by that same rate?  Not even close.  A brand new house of the same square footage, lot size, etc...would cost nearly $400k. 

Yes, they had 1 car because only 1 person had to work.

Also, TV's are cheaper now than they were back then.  That's a horrible argument point.  You can get a 4K TV for $500.  You couldn't get a 32" color TV for under $1000 back then.  As for phones, that's ~$100 per month.  Far lower than the differential from increase rent or mortgage or health insurance or student loans.....and let's not even bother going down the increased cost of education road.  We ALL know how that is.

The interest rate on your father in law's house was also probably...around 10.5%.

So a 30 year loan (assuming 20% down payment) would have cost total of $255,000 (including the down payment).

The $270k value now will be a total cost of $448,000 over a 30 year loan (at 4.5% interest).

Per government data sites, the average wage in 1990 was $21,000 compared to $48,500 in 2016 (most recent available on data set I'm looking at on social security site). So in 1990, the house represented 12.14 years of wages, whereas in 2016 it represents 9.24 years of income. Seems to me like the house has actually gotten cheaper.

Point of clarification:  the NEW house in 1991 was what you calculated to have a total cost of $255,000.  The TWENTY-SEVEN year old house in 2018 was what you calculated to be cheaper relative to wages compared to the new house back then.  If SpokenTruth is right about an equivalent new house costing $400k, then that is indeed more expensive than the 1991 house was relative to wages.  By, you know, a lot.