The Missing Middle with Mike Moffatt and Sabrina Maddeaux cover image

The Missing Middle with Mike Moffatt and Sabrina Maddeaux

How to Argue About Housing at Your Holiday Dinner

Dec 18, 2024
Get ready for a deep dive into the housing crisis that Millennials and Gen Z face today! The discussion sheds light on the stark contrast in homeownership experiences between generations, as well as the widening gap between income and housing prices. Expect rants over outdated government policies and the emotional challenges surrounding family planning in expensive urban areas. The hosts equip you with debates to tackle during holiday dinners, and they blend humor with crucial facts to spark conversations about housing affordability and generational wealth.
23:01

Podcast summary created with Snipd AI

Quick takeaways

  • The stark contrast between historical home prices and current costs illustrates that affordability is a pressing issue for Millennials and Gen Z.
  • Government policies, including high development charges and restrictive zoning laws, are exacerbating the housing crisis, hindering access for the middle class.

Deep dives

The Disconnect Between Home Prices and Incomes

The current housing affordability crisis is primarily driven by the significant gap between home prices and average incomes, rather than just high mortgage rates. While past generations faced higher interest rates, home prices were substantially lower, resulting in more manageable mortgage payments compared to today's market. For instance, a mortgage for a home costing $100,000 in the 1980s at an 18% interest rate would yield a monthly payment of around $1,730, whereas a mortgage for a $1.1 million home at a 4.7% interest rate today would require a monthly payment of approximately $6,070—almost $4,900 more. This stark contrast illustrates that even with higher interest rates in the past, homeowners were less burdened by high monthly payments due to lower principal amounts that were tied to significantly more attainable prices.

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