For an interesting perspective on these "short-term" trends ("only" 50 years) read "The Way We Never Were" and "The Two-Income Trap".macdaddy said:I don't know what will happen one way or the other. Prices seem way too high. But I look around at my generation (mid 20s) and I see things that could keep it going. Literally everyone I know is (or plans to be) a dual income family. I don't know any couples where the wife plans to be a stay at home mom (or the husband a stay at home husband). Some may want that after they have children. But their purchases now (real estate included) will prevent that from being an option. As a child, at least half of my friends moms stayed home, and these were mostly middle/upper middle class people... dad a doctor, lawyer, businessman etc, wife stays at home with the kids. When you make the leap to both parents working, there is a lot more disposable income. Two 30 year olds each making around 80k-90k all in, that's 160k-180k per year. Plus 50k in down payment help from one set of parents, or both, and suddenly a 500k "starter home" becomes very "affordable". My parents were each one of 6 children, and couldn't expect much help from their own parents. I am one of 2. My friends are one of 1, maybe 2, and I think one friend is one of 3. Resources are much more concentrated. Anyway, this is what I have seen among my friends and the people I spend time with. Prices do seem to be too high. But there are other trends at work here beneath the surface, changing some of the fundamentals.
Parental lifestyles in the '50s largely rested on being white and on being in one of the few economies that wasn't destroyed by WWII.
Dual-working couples have been around for much more of the 20th century than the stay-at-home moms of the 50s, and today's couples are using their earning power to bid up the prices of homes near good schools in nice kid-friendly neighborhoods. The problem arises when a two-income couple has a mortgage payment that's more than 50% of their incomes... and one of them loses their job.