Median 1987 home price = $110,000 (FRED).
Interest on 30Y mortgage 10% (FRED).
Monthly repayment $772 (after 20% downpayment)
Median 2021 home price = $411,000 (FRED).
Interest on 30Y mortgage 3% (FRED).
Monthly repayment $1,386 (after 20% downpayment)
$772 adjusted for inflation from 1987 to 2021 – $1,843. In real terms the monthly payment on the average house was significantly more in 1987 than in 2021
Real incomes are about 20% higher today than in 1987
I’ll be interested to see people’s thoughts on this given the market today and claims of a bubble. My personal hypothesis is that people just are:
congregating in areas that are more expensive (meaning the median household income is becoming less representative of things)
median households in said areas are richer than people realize.