It’s actually quite difficult to compare like-for-like.
You can take the average or median price, but then this ignores the fact that as more people move towards the big cities, the average house isn’t the same thing as it was in 1970.
The other problem is overlooking interest rates. The 70s and early 80s was an extremely volatile time, with typical mortgage rates hitting over 10%, 15%, and over 20% at various points. Taking out a $12,000 mortgage ran the risk of your monthly repayments shooting up to $200 in interest alone, at a time when minimum wage was $267/month.
So, $66 is probably true for a very particular interpretation, but I’m sure you could just as easily find a way for it to come out as $65 or $67.
None of the above should be read as a defence of capitalism or of landlords, just pointing out some details that often get missed.
The house my grandfather bought in 1968 cost him 19500.
I bought this exact house from my mom (who bought it from him.
I paid near 500,000.
I am comparing like for like, only because there’s been zero renovations done and no modern things out into the house other then going from oil to Nat gas for heat and electric to gas for hot water.
Everything is original, until now…house will be reassessed afterwards and guaranteed to go up more
Ah but that’s my point, you can’t compare like for like because the value of a house is far more than just the physical building. It’s location, location, location, and the town your house is in is a whole different place to what it was in 1968.
Again, not defending the state of the market, just pointing out that extrapolating this out to the requirements of minimum wage is more complicated that calculating 500,000/19,500
It’s actually quite difficult to compare like-for-like.
You can take the average or median price, but then this ignores the fact that as more people move towards the big cities, the average house isn’t the same thing as it was in 1970.
The other problem is overlooking interest rates. The 70s and early 80s was an extremely volatile time, with typical mortgage rates hitting over 10%, 15%, and over 20% at various points. Taking out a $12,000 mortgage ran the risk of your monthly repayments shooting up to $200 in interest alone, at a time when minimum wage was $267/month.
So, $66 is probably true for a very particular interpretation, but I’m sure you could just as easily find a way for it to come out as $65 or $67.
None of the above should be read as a defence of capitalism or of landlords, just pointing out some details that often get missed.
The house my grandfather bought in 1968 cost him 19500.
I bought this exact house from my mom (who bought it from him.
I paid near 500,000.
I am comparing like for like, only because there’s been zero renovations done and no modern things out into the house other then going from oil to Nat gas for heat and electric to gas for hot water.
Everything is original, until now…house will be reassessed afterwards and guaranteed to go up more
Ah but that’s my point, you can’t compare like for like because the value of a house is far more than just the physical building. It’s location, location, location, and the town your house is in is a whole different place to what it was in 1968.
Again, not defending the state of the market, just pointing out that extrapolating this out to the requirements of minimum wage is more complicated that calculating 500,000/19,500
Fixed rate mortgages have been standard in the US since the 1930s
Variable rates are still available and common. They tend to be slightly lower rates than fixed rate mortgages due to volatility risks.
I interpreted their remark to be more about the fixed rate though. The $20,000 house could have a 20% fix interest loan.
They did say “shooting up”, so maybe they are presuming variable rate mortgages.