The Crisis Of Home Prices And Wages

I laugh when I hear people say you should just save up to buy house with cash. 

Anyone recommending this is out of touch with reality and playing by money rules that are 30 years old.

We have a housing crisis on our hands that is so bad, the government is trying to address the inequity by doing something as backwards as giving people with BAD CREDIT SCORES better interest rates.

No joke (read about it here).

Here's a view over the past 12 years on how we got to where we are.

The rest of the graph will show that 38 of the 50 states have had double-digit price increases faster than the wage increase.

And this is just housing. 

The Rent Is Too Damn High

While wages still lag, don't forget that food, fuel, childcare and insurance have all risen at incredible rates as well.

So many people believe that renting is the solution if you can't buy a home. They aren't always right.

The average US renter is now spending 30% of their income on rent. 

For context, 30% is the recommended max that someone should spend on renting or a mortgage (another statistic from back when a single income could house, clothe and feed a family of 9).

In the world we live in right now, there may or may not be a bubble coming.

Sure, home prices to median household income is higher than it was when the housing bubble popped by A LOT...

But we also have a supply issue. 

There just aren't enough houses on the market and new home construction is booming!

So if its too expensive to buy and its too expensive to rent, then what choice do you have?

  • Van life
  • Homelessness
  • Moving back in with your parents while they fail to grasp how things are so much more complicated for you and hearing how it was "back in their day" on a regular basis...

Not great options.

What You Can Do

Ever hear to stop worrying about what you can't control? 

This is one of those moments.

Like it or not, this is the environment we are in so work within that for the best potential outcome by taking full ownership of what you can control!

  1. Create an intentional spending plan (click here for my free template)
  2. Identify where you want to be in 3 years
  3. Create a list of all of your debt 
  4. Negotiate it down and then begin paying it off aggressively 
  5. Brainstorm how to increase your income (promotion, new position, side hustle)
  6. Invest in yourself to develop and enhance your skills and increase earning potential
  7. Stay disciplined by talking about goals, challenges and progress with close friends

This is a short list of things you can start doing immediately that are totally within your control.

People who write down their goals are 40% more likely to achieve them. FORTY PERCENT!

If your goal is to own a home and its not written down, you aren't serious enough about it.

You can have anything you want, but you can't have everything.

Design the life you want and don't let anything distract you from achieving it.

The days of floating through life and just casually buying a home are gone, but it doesn't mean you can't have one.

You just have to do it on purpose.

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