Stranglehold baby, stranglehold.

1903 Craftsman Mail Order Bungalow
Just think how easy life would be if we could buy a kit house from the internet for under $2,000.  Life was good in 1903.
Fast forward to right now and things seem very different.  Or, are they?
You see, in 1903 the average price of a home was $2,200.  But wait, the average annual income was $700.  When you apply a traditional benchmark of home affordabitliy, that $700 transalates to a home price of $1,750.  This is very close to the kit price of the above home.  Add the cost of the dirt and of course, labor and you have a home that would have a cost of at least $2,200.  One thing we can learn from this is housing was expensive in 1903.  If you were making $700 a year how long would it take you to save $2,200?  This is why we were a nation of renters at the turn of the last century. 
Getting back to right now how do things compare?  Well, the median price of a home sold in Seattle is about $345,000.  Today’s median household income is well under $100,000.  Housing is still expensive yet we are a nation of homeowners with over 65% of our population living in owner occupied homes.
What is the difference from 1903 and today?  Financing.  We had a great system to create home ownership for the majority of our citizens by offering safe and sound terms across the down payment spectrum up through the early part of this century.  Then Wall Street and BigBank greed got a stranglehold on the mortgage industry and their lust for quick money ruined everything.  The bubble burst.
Now we are at a crossroads and in my opinion the bureaucrats have the stranglehold. They are making grave errors in judgement with new policy, restrictions and regulations that are hindering any nuance of a housing recovery.  Who are they listening to, and why? 

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