House prices house prices house prices house prices house prices.
When will the people who write these articles understand this?
I am convinced that today's house prices are tearing apart the fabric of society, without exaggeration.
When will the people who write these articles understand this?
I am convinced that today's house prices are tearing apart the fabric of society, without exaggeration.
Studio rent in San Francisco averages $1900 according to a few online sites.
That means after housing and taxes in the most expensive city in the most expensive state, a single millennial making $100k per year will have $4100 per month in disposable income. That is plenty to invest, cover a car payment and some student loans, food, clothing and other essentials, and still have plenty in the bank afterwards.
In practice, you'll have like 3000 a month in disposable income. Living in an expensive city that pays high salaries, you can live frugally on $1,000 so that leaves $24,000 savings a year if you live an incredibly cheap life.
Entertainment, alcohol, day trips/vacations, and hobbies can easily eat that up.
$2000 seems like an insanely high amount of money to spend on "Entertainment, alcohol, day trips/vacations, and hobbies", especially when you consider that's almost double the federal minimum wage.
That said I think you could make the same argument with the same numbers you point to roommate situations rather than studios. Anecdotally, most of my fellow new-grad engineering hires at around $110k had roommates. I was unique in commuting about an hour for a 1BR.
https://doctorow.medium.com/the-rents-too-damned-high-1a04a5...
But how can it be tearing apart the fabric of society if inflation adjusted mortgage payments (ie. the number you actually care about) has been trending down since the 30s?
https://awealthofcommonsense.com/wp-content/uploads/2021/03/..., from https://awealthofcommonsense.com/2021/03/what-if-housing-pri...
One of those is less brittle than the other, though:
* Down payment on a $1M home is almost the cash price of a $300k home. Saving up for a down payment is analogous to saving up for a home.
* It's a lot easier to come up with $300k than $1M if I want to pay off the mortgage early and be free (and it's financially worthwhile). A $1M mortgage is a 30-year ball-and-chain.
* A lot of associated costs are lower. For example, if I sell a $1M home bought on margin, I'm out $50k in realtor fees. If I sell a $300k home on margin, I'm out $15k in realtor fees.
I'm not quite sure the right number to look at. Down payment doesn't seem like a bad one, though.
If your job opportunities aren't in Cleveland, that housing prices have decreased there doesn't really help you.
This is then coupled with restrictions on land use for those limited areas that are in high demand (sometimes because of the quality of life enabled by the restrictions on land use).
Otherwise, there are very large swaths of the US with reasonable land prices. But they come with tradeoffs, so addressing house prices itself is not good solution. Addressing the tradeoffs themselves is a long term solution.
They do say that $100k is considered middle class, so I guess they might be semi-high earners. But they still aren't in the upper class according to income.
With you so far.
> and implement a basic flat tax
What's a "basic flat tax"? How does taxing every income at the same percentage simplify "loopholes"? Loopholes occur when deciding what counts as income.