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Comment by nerdponx | Hacker News Reader

Same here. I wasn't financially prepared to buy a house at insanely inflated Covid prices while interest rates were down in the 2% range, and I'm not excited to to buy a house at 7% while prices are still substantially higher than pre-Covid levels. Meanwhile rentals for anything other than a tiny box are just as expensive as a mortgage at those rates.

I don't understand how people who do not have 6-figure tech salaries are expected to have anything other than a poverty lifestyle when housing is so expensive.

I also don't understand these well-dressed young families parading around Boston and New York with their expensive baby carriages and $75k SUVs. Did I miss a memo on how to get rich at 30? Are they all going broke living like that? Did they all inherit a lot of money? Do they live in tiny apartments?

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You would be surprised at how much family help those families often have. I’m not talking generational wealth. Often just upper middle class parents who saved prudently and did well in the real estate market who can afford to gift $500,000 for a house.

Good point, and I'm not personally so far removed from this same category.

But it's extremely disappointing and frustrating to feel like I personally will not be able to do this for my own children, despite having a higher income than most people my age.

I wish people would stop referring to 'pre-Covid levels'. We're never going back to that. At this point, it's been years. The government inflated away everyone's wealth & debt, what we got was rampant inflation. There is no 'undo' button on this.

All it takes to "undo" it is for inflation to slow down (already happening/happened), and wages to increase a little faster than inflation. A few years of that, and it will effectively be as if never happened (in aggregate, anyway).

No, that simply isn't possible. Slowing inflation means price continuing to rise.

wages increasing faster than inflation means that effective (sometimes called "real") prices fall.

If in year N an item costs $1000 and you earn $10k a year, but in year N+M the item costs $1100 but you earn $12k a year, the real price of the item has gone down.

Yeah, except we're talking about returning to pre-Covid levels. Not whatever you just made up.

That would imply prices return to the previous levels. That will never happen with inflation.

No, it doesn't mean that at all. Real prices are a function of the ratio between the cost and earnings. If earnings rise faster than cost, real prices fall.

Now, whether or not that's a likely scenario is a separate question, but it is absolutely not impossible and has happened before.

Have you ever been into a store and had them list the price of an item as 0.00389% of your annual income?

Of course not. That doesn't make what I said false.

Have you ever had anyone say "cars cost so much more now, they were only $800 in 1942" and be taken seriously? (or whatever similar example you want to use)

Inflation has been going on basically constantly for centuries. Nobody is really expecting to buy a coke for a quarter or anything again, but people are expecting the prices to not grow 10% every couple months so that they’ll be able to switch to a job where things will feel affordable again (since jobs offering fair wage increases are basically a thing of the past).

Nobody would complain about $10 bags of chips if they made 4000x that a month.

Trust funds and “old money” from family fortunes are alive and well in places like New York, how some younger people can afford to live like this without the high paying job or business they run.

You and me both. Please share the memo when you it.

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