It is no doubt that buying new homes in the recent times will cost you a lot. According to Zillow, the median home value in the United States as of today is rated at $203,400. It is seen that the value has gone up 6.5% from last year and expected to rise 3.0% the coming months.
So, if you are planning to buy a home anytime soon, expect to shell out more money. In fact, costs may even reach up to million dollars if you are looking for homes situated in New York and San Francisco.
But, is it really expensive to buy homes since then?
Many people are wondering if the value of housing prices are of the same worth during the time of their parent’s and grandparent’s years. Most of these people are actually the millennials who are seen to be having difficulties in buying their first homes. Research and data show that the average age of people who were able to buy their first homes today are in the range of 40 to 44. People in the early periods, on the other hand, easily purchased their properties at the ages of 24 to 30.
By simply looking at the data, it goes to show that there is a huge difference.
The truth is buying homes in the early periods is not that expensive
In 1940, the median home value was around $2,938. In 1980, people could already settle down in their first properties at the average cost of $47,200. But, upon entering the year 2000, the housing prices dramatically increased as the median home value was seen at $119,600.
You may say that the worth of money before is far different from what we have today. Now, if the prices will be adjusted for inflation based on the year 2000, there are still huge discrepancies. The median home value in 1940 adjusted for inflation will be equated to $30,600 only.
This is largely the reason why buying homes today is almost close to impossible. Aside from the fact that cost of living has gone even more expensive, prices are continuously rising faster than the wages.
Although wages and salaries have risen as well, it didn’t rise in the same manner as the prices did. In 1940, the minimum wage was rated at $0.40 per hour. In 1980, it has risen up to $3.10 per hour. And in 2009, the hourly minimum wage rate was $7.25.
While houses and properties are becoming more expensive, it is essential to see properties as good investments. This is mainly the reason why it is always advisable and recommended to purchase properties as early as today.