Quote:
Originally Posted by Fighting Banana Slug
While I do feel the younger generation will have a more difficult time owning a home, is the situation described above really that much different than for other generations? The 4x price differential is probably about right. However, the same differential existed when I bought in the late 90's compared to when my parents bought in the late 60's. Parents bought a nice suburban home for $39k in 1969. Sounds crazy right? I bought a bungalow, more inner-city for $185k in 1998. Also sounds crazy, right? Potential home owners are now looking at around $750k for comparable homes. I can pretty much guarantee that a home buyer in 1969, 1998 and 2017 felt/feel the exact same way. "This is insane, it can't be sustainable. I'll be the guy that loses money on my home." Obviously it could happen if you are on the wrong side of a bubble, but overall, almost everyone feels that pain but gets through it.
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Actually your example proves the opposite given that you're comparing a 29 year period with extremely high inflation to a 19 year period with low inflation. $39K in 1969 was equivalent to $184K in 1998 dollars, so those prices are dead on. On the other hand, $185K in 1998 dollars is equivalent to $264K today so the $750K example is nearly 3 times more expensive after accounting for inflation.