Interesting graph. We're paying more than ever for housing, but I don't think there is any doubt that peoples standard of living has increased greatly in the past 20 years as well. It used to be common for a middle class family of 4 to live in a 2-3 BR, 1,200 sqft house. No more. Now that same family lives in a 4-5 BR, 3,000 sqft home.
If you talk to folks from 2 generations back, housing in the 50's and 60's generally required only 1 income, the husbands to pay mortgage. A guy I used to work with said his Dad had a 3 bed in Long Beach, nice neighborhood, and used 1/4 of his take home pay. I know what some of you astute ppl. are thinking he was not in aerospace BTW. I can't recall what he did exactly. Yes the home was much smaller than standards today. 1200 sf. I believe for kids. If you think about what has additional credit done for us? For one, it has increased prices substantially in many cases.
That's a fair point, although I would argue that if one wanted to live like this family you're refering to, you can still live that way as a 1-income family. That would mean, no Starbucks, eating out a handful of times/yr, no cable, no cell phone, no Xbox, etc. It's your kid's b-day..... you bake a cake and give him one small present. I still believe that a family can live on one-income (average income) if they make the choice to do so and live that type of lifestyle.
As a reference, my parents were able to purchase 2 homes on one salary: the first (main) home was purchased with the help of a G.I. mortgage, which probably just about every male got since they all served. The 1 1/2 percent mortgage enabled them to move from the East side walk-up to a 1/4 acre in Jersey. You could equate it to today's r.e. market with ridiculous leverage and low rates, the only (or main) difference was that then, you bought a house to live in, not to flip so you could buy the next big LCD or lease the newest Lexus/Mercedes/Escalade/etc. The second house was a vacation house down the shore. Both roughly 1200 s/f homes were about 20-30k. And my dad never made more than 40k in his life.
There are definitely some areas that are just too expensive, but again, that is a lifestyle choice. So Cal, Bay area, Chigago, NY, certain parts of Florida. Outside of those areas, you could do it if you chose to.