So? It's a fact, but why does it matter? You'd think it's obvious: home prices typically dictate affordability, and affordability is what we ultimately care about. But in housing it's more nuanced. Home prices * financing prices dictate affordability. That latter price, to finance (i.e., interest rates), have been dropping for 50 years, making it cheaper and easier to borrow and thus cheaper to afford certain price levels. It's key to focus on these interest rates as the other portion (principal paydown) isn't an expense and doesn't make one any poorer, as it just exchanges cash for home equity, which can be reversed again upon sale.
A much easier way to look at this entire discussion is simply to look at monthly fees as a percentage of income. The main fees to look at are either fees to rent the home directly (rent), or fees to rent the money to buy the home (interest rates).
Rent in particular is increasing as a percentage of income, but it's much less crazy than some people seem to think. For interest rates it's even been dropping despite increasing home prices. [0] I'm definitely not seeing any data that indicates exponential decreasing affordability which is what we should care about.
A much easier way to look at this entire discussion is simply to look at monthly fees as a percentage of income. The main fees to look at are either fees to rent the home directly (rent), or fees to rent the money to buy the home (interest rates).
Rent in particular is increasing as a percentage of income, but it's much less crazy than some people seem to think. For interest rates it's even been dropping despite increasing home prices. [0] I'm definitely not seeing any data that indicates exponential decreasing affordability which is what we should care about.
[0] http://www.doctorhousingbubble.com/wp-content/uploads/2016/0...