Its funny that you asked this because I did some researching on this in the past few weeks(for economics). Im a professional researcher.

When the soldiers came back home from WW2, they needed housing to be built since the cities were crowded. This need for housing/infrastructure/automobiles during and post WW2 created a lot of jobs. The Gov also made it very easy/affordable to buy houses since it was a major need.

So thats why a lot of people could afford/bought houses back then.

Itt: a lot of "conservatives" who want centrally planned economies.

Have to be able to entertain your friends, brah. Never understood this. I rarely want to have many people over for a meal or party.

People are saying houses are still cheap, but the average house is $275k

Taking in the average household income of about $65k/yr and houses being $275k, that's well over 4x the cost.


Small time America isn't a great alternative considering jobs. I'm assuming most cities has a majority of jobs

Unions kill new business growth and lead to a corrupt and stagnant economy. There has to be a balance between workers rights and the freedom for a company to operate and grow.

Big city pay big income, only people making six figures in bum**** Indiana are slanging meth.

Don't buy multiple flat screen TVs, multiple laptop/pcs, multiple cellphones (and service plan). Stop paying for daily childcare. Get rid of your internet, cable and dvr. Have 1 car for your family.

Stop eating out daily. No more grub hub. No more chipotle. Lunch pale prepared by your wife everyday. Live bare minimum. Have your wife prepare every breakfast/lunch/dinner and raise your children herself.

If you lived frugally and avoided the over priced cities, you could probably do it now but we have expectations and higher standards of living. Poor people in 2018 own cell phones and are obese.

WW2 veterans crew?

This is true, but I would say increased disposable income has driven house sizes. More money to spend on housing, people either spend on location - close to amenities - or house size and quality.Even in 1950, about 1 in 3 women were part of the paid workforce in the US [source 1]. There's a more detailed discussion of changeshere.

But it was a bit different to day, mostly just working class women continued doing paid work once they had children - the family needed the money. Nowadays there aren't enough jobs for all the working class women, lots of them are unemployed, and there are a lot of educated professional women who keep doing paid work once children come along.

And of course, the children are coming along later and there are fewer of them. 30yo parents are more financially secure than 20yo parents, and good old hedonic adaptation happens (however much you have, you think you need just a little bit more to be set), so they invest more into their children, too. If you have six children you can't pay for them all to go to university, just feeding them is hard enough; if you have one or two children, maybe you can send them to uni - and give them violin and tennis lessons, too. So the cost of education has also been driven by demand. In any financial exchange, the seller will tend to charge whatever people are willing to pay, and two educated professional parents of a single child are willing to pay more than two working class parents of six children.

Since people will be thinking of themselves, just an example.

I met my wife in 2000, she lived interstate and came here in 2001. She was a uni student, and after a couple of years started working full-time professional. I did working class jobs, from kitchens to sheet metal factories. We saved up. By 2008 we had $170k saved up.

At the time in Australia there was an advertising campaign, "equity, mate!" where some guy would be out in front of his house cleaning a boat, and his mate would ask how he'd managed to afford it, "equity, mate!" - without having paid off his first loan, he'd got a second loan based on the increased value of his house. We saw that many people went to the banks and found out the maximum they could borrow - and that was their budget. So if the bank would lend them $500k, that's what they'd borrow, right at the limits of what they could afford - interest rates going up 0.1% would bankrupt them. We saw a lot of stress and drama and broken marriages.

Instead, we said, "Okay, what do weneed?" As a young couple, then unmarried, weneededa one bedroom apartment. Nothing more. A study or guest room would be nice, and a small courtyard garden would be nice, too - but we didn't need them. But we also planned on marrying and then having children. But marriage was a year away, and it might take us a couple of years to have children (if we even could - we didn't know!), and after having one child we might or might not want another, and that'd be another couple of years at least. So realistically, for about 5 years a two bedroom unit would be enough.

We found a 2 bedroom unit - that is, in a little court of places not on the street, not sharing walls except garages - for $320k. So we only had to borrow $150k. In Victoria stamp duty applies, but there's also a first home buyer's grant which basically cancels that out.

In 2009 we married, and in 2011 we had our first child. In 2012 we'd paid the place off, and we looked ahead a couple of years to having a second child and thus needing a three bedroom place. Since we'd paid off the first place in 4 years and owned it clear, getting a mortgage was no problem. We found a place in the next street, three bedroom unit, and paid $535,500 for it. It was bit more this time because we had to cough up the stamp duty.

In 2016 we had our second child. Now almost at the end of 2018 we owe less than $150k on it. By the time my second child goes to school in 2021 this will be paid off. Incidentally, earlier this year a unit in the same row went for $750k. We rent our old place out at $20k.

Note though that owning 2 homes has been for us a process oftwenty years. We saved for 7 years, and were frugal and boring.

Melbourne where I live is the second most-inflated housing market after Sydney. Here the median unit (usually 2BR) price is about $500k, and house (usually 3BR on a 600-800m2 piece of land) about $700k.

By comparison,

* unemployment benefit $12k
* disability pension $22k
* full-time minimum wage $36k
first year university graduate salary average $54k
median household gross income $85k; ie half of households earn less than this, half more

* The first 3 will count as "low income" and receive a Healthcare Card, giving them discounts on medicine, at the cinemas, on winter natural gas supplies and so on.

So if you are unemployed or disabled you will struggle to pay the rent, and will have to share a house, you'll never own one - but did unemployed and disabled peopleeverown homes? If you're working a minimum wage job you could pay the rent on a small place, or one a long way from amenities (but then you'd spend more on transport); however, most minimum wage jobs are casual and part-time, not many people make a full-time career out of being a cleaner or something. A very frugal pair of minimum wage workers who got lucky with location might buy a place, but probably not.

A single person graduate will have no trouble paying rent, and can save some money towards a deposit. But financially it's wisest for them to wait until they're hooked up with someone - 2x graduate incomes, or 1x accomplished graduate plus 1x working class income, you can save quite a bit of money and get yourselves a place.

So it is doable, it's just not easy. And obviously some parts of your country will have absurd prices, and some be pretty cheap. If owning a home is important to you (and nobody says it must be so) then you just have to be a boring person, and not travel or go out much or buy the latest iPhone or whatever. That's what we did.

And evidently many others do it, too. In 1947 some 53% of people owned the home they lived in. By 1971 when I was born, it was 68.8%, it hit 70.4% in 1986 and now it's 67.1%. [source 2]. So the postwar manufacturing and infrastructure building boom (Snowy River Hydro Project, etc) put lots of wealth into the country and boosted the numbers up, since then the fraction has only varied by +/-2% at most, going along with economic booms and busts. For all the screaming and drama and middle class begging for handouts we see in the papers, people are managing it.

Basically, if you have a secure full-time job in Australia, you are doing alright; if it's a professional job then you're doing very well indeed. It's the unemployed, disabled, sole parents and so on that have it tough, plus of course Aboriginals. The rest of us are mostly whingers.

While consumer goods like tv's were way more expensive, the big purchases like houses and cars were way cheaper. Also, workers didn't have to pay for their healthcare or retirement so that people kept more of their pay. There was no cable tv, no cell phone bill, just fewer overall goods to spend money on back in the 50's.

Companies have slowly but surely over time transferred much of the cost burden of benefits to the employee while keeping worker salaries low and transferring those dollars to executives. Look at the CEO pay multiple in 1950 vs what it is now. That will tell you all you need to know about the priorities of corporations and why most need two incomes to afford all of today's niceties.

No it hasn't. The average house cost to income is like 4x now. Sure you can live cheap in bum phuk nowhere, but then your income will be lower.

But, interest rates are way lower so come to think of it, housing cost really hasn't changed all that much as a percentage of income. It's all the ancillary stuff and companies screwing workers.

They were able to. My understanding is it largely had to due to factory jobs paying good wages. It allowed for a single person, often the husband, to afford the purchase of a home and raise a family.

Today many of the good paying factory jobs have gone away. Homes cost more, in part due to regulations, and other causes.

Solid point. Plus don't forget about the cost transfer from employer to employee. The $20/hr average adjusted salary in the 50's didn't have health insurance or retirement subtracted. Those two items alone are often > 10%.

Yes but I assume houses were cheaper back then

Public education system not even once man. Unions were/are a LARGE part of all manufacturing jobs leaving the US. Not saying they arent needed, but they always morph into a greedy cesspit that drain the parent company(s) dry instead of just helping workers get competitive pay.

Also 'rich' people already pay a disproportionate amount of taxes. Shaniqua and her 50 kids and Billy Bob pay next to no taxes and even usually get far more money BACK than they even put in. Corporations are a different story and dont need to pay more taxes, but do need to pay their workers MUCH better and stop evading what they are supposed to pay. A big problem was/is our corporate tax rate.

Because the US isn't the only country in the world with a manufacturing base now. Most of Europe was destroyed at the time.
Women entering the workforce
other reasons

Yes this is another contributer to the problem.

Most of those houses are still around too. Myself and my family grew up in houses built in the 1960s in Florida, they usually are 2-3 bedrooms and 1000 sq ft. You can get one for 100k these days.

People dont want that though, they want bigger and better and "new".

Compare apples to apples. Average prices went up but average houses are much bigger. People have less kids too, but since all items except houses are cheaper, people want bigger houses to fill it up with more cheap "stuff" imported from china. How many people these days make their children share a room compared to back then? That was the norm back then that 2 or more kids shared a bedroom.

Food was also more expensive, proportionally, as were electricity and natural gas. In 1960 households spent a bit under 18% of their income on food, now it's under 10%. [source 1]. So that's another 8% of household income that can go on other things.Healthcare and retirement are one thing. But it is quite possible, believe it or not, to exist without cable tv, to go on the cheapest mobile phone plan and keep a lot of communication by internet, to not buy new clothes simply because you tire of the old ones, and so on. And if you spend less on all that stuff, you will have more set aside for healthcare or retirement.Again there is the factor of hedonic adaptation. It's well-known that whatever someone's wealth, everyone feels if they just had slightly more they'd be secure and happy. Indeed, in one study people with an average net worth of $76 million felt they need 25% more to be happy; one insisted he had to be a billionaire before he could relax.

This explains both the greed of CEOs, and the insistence that two incomes are needed for prosperity. Note that you didn't mention what the incomes were: 2x $36k? 2x $100k? In Australia recently childcare rebates were changed so that households got nothing back for childcare if their income exceeded $350k;The Ageran articles from women complaining this was unfair and sexist. To be clear: households on $350k or more were complaining they needed more help from the government.

So each couple needs to discuss this: looking just at the numbers, do they really needtwo incomes? Or do they justwanttwo incomes? Do theyneeda house twice the size of one 30 years ago, or do they just want it? Do they need cable tv, dinners out three times a week, and a luxury car and holiday in Aspen? Or do they just want these things?

My son does his 3 jobs, ticks them off and gets his $5 pocket money each week. He puts these into Give, Save and Spend jars. He gives to a charity helping prevent worms in African children. He's saving for a new bike. And he spends... well, today he bought a couple of crappy plastic toys, one for himself and one for his little sister. PJ Masks cars or some sht. Anyway... when he goes to buy, often he wants this, but also wants that. Hechooses. The idea is to teach him: you can't have everything. If you spend your money on this, you cannot have that.

This is a lesson many adults have never learned, or if they were taught, they have forgotten.

Again, there are many in the Western world doing it tough financially. But if you have a permanent full-time job, and certainly if you havetwoof them in your household, or if one of the jobs is a professional one rather than blue collar or customer service work, you are not one of the people doing it tough financially, except by virtue of your own poor choices. You may be doing it tough in other ways - difficulties with personal relationships, not enjoying your job, physical or psychological health issues, etc - but if you have a permanent full-time job, you're doing alright.

Whinging rises with income, though.

Yep, this is where all the quality of life arguments come into play. Poor today are better off than the middle class of yesterday.

My mums family had 4 kids total, first house some of them had to sleep on a sleeper sofa in the living room. Second house had 3 bedrooms, some of them very small. Both houses I grew up in were 2 bedroom, just under 1000 sq ft but I was an only child so had my own room.

A big problem is not just the greed of people but personal finance is very poorly understood across the US, even among the educated. Its something you have to teach yourself because it isnt taught at all or very well in schools. Everyone WANTS a giant ass house and banks are happy to hand out loans for them. And now the news is flooded with terms like "predatory lenders" removing all personal responsibility from people for making their own life decisions. "Im poor and the banks took advantage of me" is not an excuse. There are tons of books on investing, house buying, loans ect at any library and its how I learned how investing/retirement accounts ect worked. You just have to want to put the effort in to learn it.

Most of us are not in Australia. Also, please compare apples to apples. Don't compare a color TV, which was a miracle invention at that time, to a TV now, nearly 60 years after they started being mass produced. The only technology that even comes close to CRT TVs of old is OLED, and an OLED TV is not a few days worth of the average US wage.

Sorry if it was mentioned elsewhere, but imo a significant factor is the number of people with investment properties now.

Property used to be a utility, a public good. There were landlords, sure, but they weren’t making out hand over fist. Every other person I know my age is a landlord now, because property has become an investment. In the UK that was partly because tax rules on pensions changed, so if were able to invest you looked elsewhere, and the banks obliged with buy-to-let mortgages, which didn’t even exist 20 years ago.

Edit, to be clear, I don’t think people were particularly complaining about house prices 20 years ago, at least not in the uk. Investment demand took off shortly after and supply hasn’t caught up.

During those times:

-unions were strong (tho their own greed killed some of them by driving employers away)
-less foreign competition
-more factory jobs
-min wage kept up with inflation
-$ was based on gold exchange standard (limiting supply limiting credit)
-less local competition as networks weren't as connected the way it is now with Indeed.com
-cheaper housing prices/prices in general in accordance to the location of employers (cities)

Greed, competition, and monetary policy


Min wage at that time was $21 in today's money. And all u had to do was walk to the factory manager or have an in like today and start. No cover letter bull****.


Colleges raised tuition faster than nat'l inflation. Fiat money replaced GS. Corporations bankrupted the little competitors and expanded their power. Corporations bribed legislators and executive politicians (banning union bargaining). Globalization and growth of internet now made everything more competitive as more ppl joined the competition. Credit over the long-term in general. New technology killed the majority of certain workers like cobblers and some factory workers. Women entered the workforce driving competition and prices up (as they spent new discretionary income). Utility bills went up as corporations refused to incur financial underperformance.


The elite made power moves to become more elite at the expense of the common American's discretionary income as everyone at the top raised prices. The government could just tax corporations heavy, especially if they rely on foreign workers bcuz the American market is super profitable. It's better to pay a heavy tax to sell to the American market that w/o but that's not gonna happen bcuz bribes.

This too. Real Estate investing proved profitable so ppl formed companies to drive RE prices up in the form of higher rent and appraisal value and everyone and their mother jumped in, then housing prices dropped only to pick up and hit new record highs disproportionate to wages.


Same with contractors and union rep constructing the houses. They pressed for more $, as new laws required workers comp and other insurances.

Plus growing healthcare costs as pharmacies and medical tech manufacturers realized they held leverage to charge as much as they could.

As self-employed business men incurred higher prices in CoL and operation they increased their prices to hold or improve their profit margin which only drove up prices for their clients. So increases in price motivated others to increase their prices to keep and this is "sustainable" thru credit financing. Which is why cars, homes, and home improvement companies accept payments.

Well, that too, stupid messy ppl typically don't have the most optimized financial strategy and overspend to satiate their insecurities.



Let me play devil's advocate here:

Corporations can't afford to pay workers more as that translate into less financial power translating into less competitive strength against other corporations that have more $. Public C-corps operate off equity shares. If shareholders notice that the corp will lose out to it's competition, they sell their shares and jump ship devaluing the worth of the corp and (worst case scenario) bankruptcy.

Some good posts and some terrible posts in here.

I know one thing (from personal experience). Wages have definitely not kept up with inflation in many fields. The cost of gasoline alone vs how much hourly wages have sloooooooowly gone up is enough in itself.

Not saying you're wrong but you can't look at one cost by itself.

People keep saying move to a small town where housing is cheap, those places don't have the jobs that's in demand. Small town Wyoming isn't gonna hire 300 engineer graduates, 200 nurses, 500 IT graduates. That's why everyone moves to a suburb near a city.