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
The short story is that most of the value of housing is its location, i.e. proximity to good schools, jobs, and other nice amenities.
And proximity is by definition scarce. It’s really hard to build new, high-value neighborhoods from the ground up. If you look at the highest housing prices in America, it’s because they’re located within close proximity to things like Silicon Valley or Wall Street or Hollywood, stuff that took decades to accumulate in value.
So when everyone in the country gets a raise, a disproportional amount of that goes towards bidding up prices for scarce things, hence why housing is going up in price faster than things we can build more of.
The ELI5 answer is because they’re not making any more land, and not many new neighborhoods people want to move into.
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