College is weird in that the big name schools have gotten both more expensive but also more affordable, depending on family situation, with most students not paying the sticker price.
For a family with the median household income or less, MIT is only going to have a net price averaging around $5k per year.
College is weird in many ways.
In 1960, less than 8% of the US population had a college degree. Right now it’s almost 40%.
Not really: tuition at MIT is about $25k a semester, so you’d need a job offer of around $250K. There are at lease some kids from MIT being offered very close to that, with signing bonuses and such. Apparently $170-$190k is a “reasonable” offer for top tech companies from good schools. This is not to say everyone gets that sort of offer, of course, but it’s possible.
That said, college is undeniably way, way, way more expensive than it used to be, and MIT isn’t more expensive than any other school*.
*Except if you can get into MIT you likely can get a great merit scholarship to some of those other schools. But it is weirdly true that the sticker prices of most schools, both private and out-of-state pubic, have all settled into the $70k-$80K for total cost of attendance/year, regardless of quality. And need-based financial aid is a whole different thing.
Yeah, it’s possible, but my offer was from a run of the mill Route 128 company, nothing special. I can’t find any sites that give that kind of salary for entry level BS degrees. New PhDs or even Masters is much more likely.
I just used MIT since that was my experience - given the amount of money the 50 year class donates, we’re doing pretty well.
And indeed MIT is not the most expensive school - the people who really suffer are those who pay MIT prices for non-MIT job prospects. And whose schools don’t have the endowments to pay most of the tuition.
I grew up, as I said, in a struggling working-class family in a rural area. We actually got a television in 1950, I think. This made us one of the earlier people to get a television in our own home among Americans. There were televisions in some bars and restaurants before then, I think. After 1950, Americans quickly began buying televisions and the clear majority had them by 1960. I think we got a color television in the mid-1960s. Up to the point that I graduated from high school in 1970, I only went to movies a few times a year. It was too expensive for all our family to go to one any more often than that, since we had to drive a ways for it.
I suspect we’ll be seeing even more of those schools closing as demographic changes force more competition for students and tuition checks.
We also live in an era when a college degree is more expected amongst the middle class.
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What I’ve gleaned from this thread is that incidental expenses have probably stayed fairly constant as time has gone on (I.e. people now have the new expense of the internet, but it just replaced the older purchases of newspapers and magazines; air travel is more frequent, but less costly), but the fundamental costs of living (i.e. housing, medical care, education) have indeed gone up significantly.
And so I don’t think it’s perfectly possible to live like a person did in the 50s/60s, unless one chooses to become a lot poorer than they would have been considered back then.
Otherwise, middle class living is indeed more costly, and it’s not simply because people these days demand the latest fashions, or huge tv’s, or the newest gadgets (anymore then back in the day).
You just simply can’t buy that modest mid-century bungalow for the same percentage of your income, you can’t get the same quality job with the same credentials, you can’t commute the same distances to work or shop, you can’t expect that your health insurance rates remained consistent with inflation…and that leads to the dual income hustling life (and attendant obligations and expenses, like costly daycare, or an increased reliance on prepared foods) that we see today.
I live in a neighborhood where the houses (about 240 of the original ones) were built in 1948-54 and sold for between $9500 and $11,000.
1300 sq ft, 3 BR 1 BA. No garages. The last of the original buyers have died or moved into nursing homes in in the ten years since we bought ours for $650,000.
The original buyers were mechanics, masons, carpenters, postal workers, occasionally nurses and schoolteachers.
Now our house is worth over $1.2M. The only people I know who have bought in the last three years are doctors, hedge fund managers or executives in multibillion dollar companies.
This is not an area which has benefited from a new highway, commuter rail or population growth (~1% annual growth for last 30 years)
But the ability of the carpenter grandson of a carpenter to buy the house next door to the one grandpa bought 70 years ago is pretty close to zero. He’d need to be a contractor with 15-20 employees to afford that. And have a working spouse.
If a 1300 square foot house has appreciated to $1.2 million, that’s a pretty big sign that population growth just isn’t allowed in your particular area. If it was, maybe your community would still be affordable for mechanics, carpenters, etc.
The whole state has increased in population by less than 20% in the last 40 years. And we are 25 miles from downtown in the second or third ring of suburbs.
In our area, the modest homes have not appreciated to $1 million, but they HAVE appreciated to the $3-400k builders are willing to pay for the lot. Buyers have to bid against those builders - and be willing to live in the smallest/oldest home on the street. Homes are more affordable - with fewer teardown - in adjoining suburbs.
I can’t find an authoritative source for statistics on this, but it appears to me that the number of carpenters (as a proportion of the U.S. population) has been going down since the years (1948-1954) that you mention. There have been shortages of carpenters frequently since then. In general, the proportion of jobs like mechanics, masons, electricians, and plumbers (compared with the overall population of the U.S.) has been going down, while the proportion of jobs like doctors, lawyers, and business executives (compared to the overall population of the U.S.) has been going up. And the school teachers and nurses in your neighborhood were women married to mechanics, masons, electricians, and plumbers, I suspect. Over time the jobs in the U.S. have slowly shifted from ones requiring (largely) physical work to ones requiring (largely) intellectual work. Please understand, I said slowly shifted. And the need for physical work will never disappear completely.
Have you actually done a thorough survey of your state and determined the proportion of neighborhoods where the inhabitants have shifted from basically carpenters (et al.) to hedge fund managers (et al.)?
Houses have been getting bigger for decades. That accounts for some of the price increase.
Which brings us back to the increased expenses of modern living. To find that house, you are going to the adjoining suburbs, so you are increasing your distance from where you might otherwise be spending your time. Your commute is longer, you get home later, you have less opportunity to pick up the kids, you have less time to make dinner - suddenly, by moving to where you can actually afford your home, you’ve taken on additional pressures on your schedule that can only be alleviated with greater expenditures (like daycare or hired house maintenance)
I don’t disagree with the general premise that bigger houses will cost more, but your article was comparing houses sizes from 1910 to 2010 (and even then notes that in some areas, like San Francisco and Miami, housing has decreased in size).
The comparison here, however, is between the cost of an average “modest” home in the 50s/60s and today. And over that time the same houses have risen prodigiously in price, far and above what would be predicted by inflation.
The point being that it’s not just simply a matter of foregoing the McMansion to afford the quaint 2 bedroom 1 bath house with a carport instead of a garage; it’s that that that simple house, built 70 years ago, is no longer within the means of middle class people (or, if it is, it’s taking up a much larger percentage of their income, or has been made feasible because the household is bringing in multiple incomes).
What I tend to wonder, though, is if this problem won’t be alleviated by the widespread dying off of the baby boomers. As they die, will that create more supply for the rest of us, and reduce the cost of purchasing? (Or have large companies that buy up lots of real estate to rent undercut this anticipated savings?)
The commonest move today (in the U.S.) is not from the cities to the near suburbs. That was what was happening from about 1925 to 1975. It was because cars became cheap enough and the roads got better so it was possible for many people working in the cities to drive into work each day. Then a certain amount of work places moved into the near suburbs. Living in the cities then became cheap enough (because some people had moved out) that some people began moving back into the cities. These were mostly people who had no children (but that became more common too). The most common movement now is people moving from the near suburbs to the far suburbs or to rural areas, since often it’s possible to work remotely. And, of course, the increase in population has been slowing down and will presumably reach the point where the population is decreasing slightly.
Also, new “starter homes” aren’t being built. Housong prices are going up because there is a legitimate shortage. Builders are focused on larger houses, and communities (generally dominated by current homeowners) strongly prefer thise types of development. Smaller, denser home construction is pretty uncommon, at least around here.
Land is expensive, and builders get a lot more money for their investment by building larger homes. So builders are focused on larger homes because it is a better value for them to do so.
That is likely true in many places - not so much here in the western burbs of Chicago. Many of the burbs in a row are long and narrow running north to south along an east/west commuter train line. One burb one way or the other is just a train stop - or expressway exit - in either direction. Few people work in the burbs in which they live.
Same goes for jobs. You can choose to work a long way from your home (for various reasons), or you can look for a lower paying job closer to home. Or move closer to the job. Your choice. Very frequently I see couples who work far from each other, and choose to live in the middle - ensuring that they both have lousy commutes. Just not a choice I would ever make. If you decide you HAVE to have a certain level of income, then you rationalize all manner of inconveniences necessary to achieve that.
IMO, it still comes down to being satisfied with what you can afford. Even in my town, you can buy a modest-sized ranch or cape cod - which would have been thought perfectly fine in the 60s-70s. But so many wealthy young people from the city want to throw up $1.2 million mega mansions. If you wanna compete with them and don’t have one high paying job, then yeah, th both of you have to work. Entirely your choice.
But expensive land is in part because communities limit how much new construction they will permit.
I take you at your word, but it seems to me that you’ve omitted a key fact to help me put this in context: you can buy a modest-sized ranch or cape cod, for how much?