Soaring Home Prices and Relatively Flat Income
Inflation drives house values up, and if income is keeping pace, most of us are happy.
When income stay relatively flat - as you can see on this chart from 'the real estate witch' the gap between house prices and income makes us sad... how sad?
House prices have increased 7.6X what it was in the '60s and in another study the ratio of house price to income in Q1 or 2022 passed 8 for the first time (and only time) since 2006...
Inflation is still moving up pushing us past the prior all-time low in housing affordability. Those on the bus (already have a house they own) tend to be in better shape, as they've seeing those values go up and they can move from house to house - this is bad news for anyone who missed the bus (doesn't already own a house).