Mastodawn

PadreSJ Nov 28, 2023

Data Points:

Federal Minimum Wage
1970 - $1.45
2023 - $7.25

Median Home Price (US)
1970 - $23k
2023 - $431k

In 1970, the down payment on a home (15% or $3,450) would take ~3,000 hours (after tax) or 1-1/2 years at FMW (40 hours a week).

In 2023, it would take ~10,790 FMW hours (after tax), or 5 years 3 months AND you'd never be able to afford the payments.

...

This is a good thing to remember when the older generations mock the younger for not building wealth as they did.

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Skip Lacaze

@PadreSJ Nobody at minimum wage in 1970 could get a mortgage on a $23,000 house. At 15% down and 7.5% interest, monthly payments would be $137/mo, plus taxes, homeowners insurance, and mortgage insurance—more than half of gross wages. The banks’ rule of thumb then was working people could afford a home that cost 2.5 times their annual income, with a 20% down. That home would require a wage over $4.60. OTOH, teachers, Postal Clerks, and most union workers could buy a house.