Ramit Sethi compares housing costs across 40 years: in 1984, a median house cost 2.5 times median income; today it costs 6 times median income. Skipping lattes won't solve a problem this structural.
Roughly 2.5 times annual income.
About $30,000.
$81,000.
$250,000.
$75,000.
Buying a house is incredibly unaffordable. In fact, I want to take you back in time and show you what housing looked like for your parents. Forty years ago, a house would cost roughly 2.5 times your annual income. Today, the median house costs six times your annual income. That means about 40 years ago, a person making the median salary, which was about 30k, would buy a house costing $81,000. In current dollars, that house cost 250k. Today the median income is $75,000, but the median house costs over $450,000. That means housing costs have almost doubled in price from 40 years ago. What this means is that housing is historically unaffordable. You cutting back on Matcha is not going to change anything about being able to afford a house.
