The central problem is that most of the NYT discussion of housing affordability is theoretical, not real. So, for example, the article talks about the purchase price of a new home relative to household income. The problem is that a fully-employed male today makes (in inflation-adjusted dollars) about $800 less than his counterpart thirty years ago. But the difference in median income for families has shot up dramatically in the intervening years because the typical married couple now sends two people into the workforce. In other words, it now takes two earners to pay a mortgage rather than one. A generation ago, a typical wage-earner could buy a typical house; today, it takes two incomes to buy an average home in fully 75 percent of America’s cities. And that means housing is just as affordable as it used to be?
She also points out that the Times compared today’s numbers with the early 1980s, which was a low point in the real estate market. It would have been better to compare today’s figures with the early 1970s.
As much as we should cheer the growing opportunities of women in the workforce, we should also recognize that business has also cheered this development. They have been able to hold the costs down on salaries as Americans adjusted to the two income family.
One income should support one family.
The Times article suggests that that there is less pressure on families in the heartland than in the Northeast and CA. I assume that they are adjusting for the differing salaries across the country. I would like to see Warren respond that claim.