eli5 – Why is the cost of housing so high compared to wages?

Question

I see charts from the 1960’s – 2000 showing wages keeping up with the cost of housing. Then there’s a huge boom in housing cost. What factors caused the price to jump so high? Is it only the low interest rates, or did something else happen?

For example: [https://imgur.com/a/8HWIlqx](https://imgur.com/a/8HWIlqx)

Edit:

This guys just uploaded a video today answering the question I posted. He says a lot of the same things that you guys said too[https://www.youtube.com/watch?v=eL9DBjfhWAE](https://www.youtube.com/watch?v=eL9DBjfhWAE)

In: 50

Answer 1

First of all, the housing price metric is skewed by interest rates, which used to be much much higher before 2001.

The rent metric is much more relevant and it seems like it’s pretty stable relative to income outside of a few years in the 70’s when inflation was really bad and the 2010’s when gentrification removed a lot of the cheaper rent available in the market.