Economist explains why you can't afford a house anymore

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SOURCES:
I've linked my sources in the blog that goes along with this video. Links are in the text.

Timestamps:
0:00 - introduction
2:11- housing consumption
9:03 - Backblaze
10:22 - housing investment
16:11 - mortgage affordability
19:21 - discussion

Attribution:
Some of the more creative images were generated with chatGPT

Narrated and produced by Dr. Joeri Schasfoort

[MoneyMacro]

Protect your personal or business data by signing up for fully-featured free trial at backblaze.com/moneymacro

[YearousMona]

Our economy is unstable due to a number of factors, including housing problems, foreclosures, global swings, and the fallout from the epidemic. To reestablish stability and spur growth, all sectors must give rising inflation, slow growth, and trade disruptions their immediate attention.

[alexsteven.m]

Our economy struggling with uncertainties, housing issues, foreclosures, global fluctuations, and pandemic aftermath, causing instability. Rising inflation, sluggish growth, and trade disruptions need urgent attention from all sectors to restore stability and stimulate growth.

[Greggsberdard]

No financial institution should be allowed to own 40% or more of the single family homes. This recession is paving a way for a monopoly on homes to further rid of the middle class. It would be wise for most Americans to not sell their homes if they're able to.I want to buy houses cheap in 2024 and maybe invest in stocks. When's the best time to buy stocks? Some say they make a lot, others warn the market is risky. Advice?

[sarawilliam]

Because so many people overpaid for homes even while loan rates were low, I believe there will be a housing catastrophe because these people are in debt. If housing costs continue to drop and, for whatever reason, they can no longer afford the property and it goes into foreclosure, they have no equity since, even if they try to sell, they will not make any money. I believe that many individuals will experience this, especially given the impending mass layoffs and rapidly rising living expenses.

[lingth]

In Singapore, the govt builds them.. offers the buyers a loan instead of the bank . Than enforce rules that you can't use it as an investment.. so to keep house affordable for ppl who need them to live not invest.

[juicemonger]

Regarding the IMF study at 16:10, one thing missing from the analysis is that while interest was higher and home prices lower, those buyers from the 1980's were able to refinance their mortgages as rates dropped, decreasing their monthly expenses. Buying at a high price with a low interest rate will NEVER present a similar opportunity.

[michaelschiemer]

Mortgage rates are currently at an all time high since 2000(23 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market

[networkgeekstuff]

I realized where the problem lies when I was buying my first apartment a few years back. On any apartment presnetation session there was me as 20-something old with my wife looking for a place to live and always competing with at least 2-3 other 40-50+ year olds looking for investment as their second-third apartment they can airbnb or rent. When young families have to compete with folks looking for an investment, that is not a good sign.

[IsaacKeaton]

We need policies to discourage speculative investments. Herd mentality equals chaos. Personally I shifted from following the crowd to solid research and saw $1.3 million in returns under a year.

[Zei]

The NIMBYs in Australia are the worst. The government wanted to build public transport in my city, a light rail to get from one side to the other. It would reduce the need for cars and give us the opportunity to build higher density. But NO. Everywhere you would see bumper stickers “NO LIGHT RAIL”. Why they’re opposed to it? I have no idea.

[fredericthibault]

Forgot to mention a major issue in Canada: the cost per average household wage. A little less than 30 years ago, the average cost for a two-person household used to be two times their combined wage. Now it is four times. The average Canadian wage did not follow the house cost increase, which means that even if the interest rates are lower than they were 30 years ago, you will need a bigger cash down to buy a house. As a result, the younger generation cannot leave their parents' house because they cannot manage to have enough cash down to have a good enough mortgage to buy their first home in the city that they live and probably work.

[seasidescott]

USA: my buddy works for the water department locally and more than a quarter of homes aren't being lived in even though many homes are not listed as vacant. Just being held off the market. Banks or investment firms have the lawn mowed and minimal landscaping with lights on timers but no one living there ever. Makes it hard to fix leaking pipes when owners are listed as the obscure trust names.

[MuleriderLife]

Good overall summary. You are one of the few channels that try to tell the whole story. No click bait videos, just information. Please don't ever change!

[TheJubess]

All though a cheap house with a mortgage with a high interest rate and an expensive house with a mortgage with a low interest rate might me paying the same monthly payment. The first has more opportunities:
1. Refinancing when rates drop
2. Paying off your debt will instantly give you a high yield without a lot of risk.

[gauloise]

Also the globalisation of the housing market. It used to be Parisians lived in Paris, and maybe a handful of hardcore, dedicated expats. Now every wealthy person in China, India, Turkey, Dubai, you name it wants a pied a terre there, or in NYC or London, etc. Add that with so many apartments being converted to Air bnbs, .

[KookyBone]

I just read an article how Vienna in Austria kept their house prices and rents so low, the simple solution: the city build a huge part of houses themself - this while profit is limited and all profit must be used for new buildings... And about 50% of the houses have to be rent to low income people. And to make sure no ghettos start out of this, it needs to be mixed with people of other incomes... So the goal is not to put all poorer people in area, but always try to mix them, this is most times a good way to prevent ghettos from forming.

[rogerbartlet]

The NIMBY issue is rampant where I live - they gang up legally with HOA's, zoning and building permits to preserve property values. It turns you can get someones attention very easily with a story that has their home value dropping.

[arznal]

As someone trying to buy their first home in Toronto, $100, 000 for a studio apartment sadly sounded like a joke, as it would be much closer to $1, 000, 000 (even the absolute cheapest would be more than 300k). This was a great video for me though as there is so much unsubstantiated talk around why the prices are unaffordable to Torontonians, I really appreciate this channel's well presented theories and explanations

[Benjamin.Jamin.]

Recommend looking at UK or Ireland. I work in planning and have worked in modelling housing demand in the past. We use factors including 1. internal migration. 2. external migration. 3. household size trends. 4. household formation. 5. birth / death rate. We've known in the UK since the 00's that HUGE numbers of new houses were needed. External immigration has been even higher than predicted. Household formation, a bit less. Ofc nowhere near enough were built. Add speculation, NIMBY factor etc. and its a disaster. But at the bottom is supply/demand.