I wonder what the ratio would have been like in 1890. I read Piketty’s book and find the argument intruiging that mainly the two world wars produced the middle class and that income and wealth distribution are simply bouncing back to normal as they were before 1914.
House prices are often hard to figure out. Is the market high? It is low? What is normal?
I'm fond of the ratio of average house price to median household yearly income. This gives a number that you can compare across countries and over time.
For you Americans: https://www.longtermtrends.net/home-price-median-annual-income-ratio/
The lowest I've seen in my lifetime is 3.6 in the USA in 1973.
The highest I've seen in my lifetime is 8.9 in NZ in 2022.
NZ has fallen off of that back down to about 7. Which is now equal to the highest the US has ever seen.
The 2005-2007 subprime meltdown, where up to 25% of subprime loans became bad debt, the peak was at 7.
The US is back up to about 7.
Discussion
Good point
I think in Switzerland it would be somewhere around 12-15 years. But also house standards are far higher. Since building more durable and more isolated also means far higher prices.
Interesting. Perhaps. I should read that.
I just noticed the second graph in my link, set to all time and go back before 1950. Homes were far more expensive than now, compared to average personal income. I guess people lived in large families still so that made it possible.