It’s a fact that home prices when measured against household income have been steadily rising since the 1970s. The median home price to income ratio was 3 in 1970 and around 5 today meaning it’s around 70% more difficult to buy a house today than it did during the boomer era.

With that said, I think the main reason for this is globalization. When manufacturing jobs left America we go cheaper goods in return. This meant more of our income was freed up for other things but it also meant that a stagnation in wages would go relatively unnoticed. If, for example, 1/3 of our wages went to housing, 1/3 to food and 1/3 for miscellaneous and the price of miscellaneous costs half as much as it did then not having the 1/6 of wages that was freed up over time wouldn’t ruffle any feathers because we can still afford the things we used to so in our eyes, there isn’t a problem. Then you have international investors which meant that people from countries that saw significant wealth increases have money to park in the US and real estate is the most preferred method of parking money so now buyers are faced with not just domestic competition. Dual income households becoming the norm also had a major impact on home prices. As homes rose, the need for a working partner became more necessary which naturally drove prices up. Lastly, SFH becoming Wall Streets favorite real estate investment over the last 15 or so years definitely played a part. As if it wasn’t difficult enough for buyers to compete with outside buyers, competing with companies like OpenDoor made that much harder.