Two of my friends with relatively ordinary jobs have stay at home spouses. The cost of daycare is so high that it would basically eat up one of their salaries, and this way they get to actually spend time with their children, which they find to be more filling than a BS career.
It is definitely doable in the US, and I would imagine most Western countries as well. My knowledge outside of them isn't current enough to speak for the rest.
It's do-able, but the housing crisis needs to be resolved. People will never own a house if they didn't have skin in the game by 2021. Salaries are not rising to match housing price inflation.
Specifically, both house prices and interest need to go down heavily. Sadly, they used higher interest to try to lower prices, and that didn't really bring prices down.
More supply isn't helping much either, as there is no diversity of supply, and builds aren't undercutting the market yet.
As a layperson I have a feeling that's not going to happen. The working class has too much wealth tied up in their homes because US society and the government have encouraged people to treat it as a store of wealth instead of a box that shields them from the weather. People talk constantly about "getting on the property ladder", "buying more land because they aren't making more of it", "having a landlord side hustle", etc. A house is a lot more tangible than stocks so people without knowledge of finance feel much better about investing in one (understandably so - also forget about Social Security). Combine this with associated government tax subsidies and mortgage underwriting programs and you've basically created a situation where home prices can't do anything but go up.
Look at the amortization table for the proposed 50 year mortgage: borrowers wouldn't be making a dent in the principal for a good 10 or 15 years. The underlying assumption here is that people would make money via home price appreciation, i.e. speculation, not from creating an actual store of value. We already kicked this can once when the 30-year mortgage became a thing 60 years ago.
Of course one can't draw the current trend line into infinity because of affordability but I highly doubt it'll go down appreciably. I also don't know enough to have a solution to this problem - any ideas?
The uneven demographic curve shows that many elderly current homeowners will have to sell over the next couple decades due to death or moving into assisted living facilities. That will increase supply and reduce demand, although the impact will vary widely by region. Don't expect any major price reductions in popular areas but there may be further collapses in certain rural and economically stagnant areas. You can look at Japan for a preview of how that plays out.
Tax planning can help here. By converting the house to ownership by a tax-advantaged trust , a family absolutely can continue to extract rent from a former property without selling. Doubly so if the mortgage is paid off.
Sure, that can help affluent families in some cases. But many elderly people will be forced to sell (or reverse mortgage) their real estate holdings in order to pay for long-term care. Fees at decent assisted living facilities are often in the $8K per month range now so the only way to afford it is to sell the family home.
that's because "more supply" hasn't been anywhere close to enough supply, judging by historical housing needs by population age demographics. More supply is absolutely the key thing missing, but it needs to be a lot more supply.
Not all of those empty houses will be places people want to live in, but I'd bet a fair amount of them are perfectly fine places people would love to call home if they could only afford them.
> It's do-able, but the housing crisis needs to be resolved.
Why? Almost everywhere a majority of people (and certainly the majority of voters) are already invested in housing and do not want their investment to loose value.
> Specifically, both house prices and interest need to go down heavily. Sadly, they used higher interest to try to lower prices, and that didn't really bring prices down.
People are more willing to spend an ever-growing share of their dual-incomes on housing, which drives housing prices modulo interest. So interest has no actual effect on housing affordability, since it doesn't influence how much people are willing to spend. If you lower interest, prices are simply going to rise such that people spend the same % of their income on housing. If you increase interest, prices will (eventually, slowly, since this is a seller-dominated market) fall to match.
> More supply isn't helping much either, as there is no diversity of supply, and builds aren't undercutting the market yet.
New builds will never be cheaper than existing housing stock. Low-cost new housing is a mirage; new housing is premium by construction.
It doesn't help that new builds seem to focus on the high end for housing (because that is where the profit is). If we keep building more expensive housing it shouldn't be surprising that the average cost of housing increases.
People buying their first house almost never got new housing - ever. They’d buy a starter home, which was older, needed some work, etc.
A big issue here is expectations - people are complaining because they can’t buy their own standalone house in a good neighborhood right next to work - while work is in a high demand, high pay area.
Also, well paid work is centralizing, so so the gradient is getting steeper (or was, pre-remote work).
Guess what, that was never the norm!
But a lot of people did buy in what were at the time low demand, high supply, areas that later became high demand areas! Like early Los Angeles.
Also, everything is getting more expensive relative to ‘hour worked’ because of centralization of capital, and more work force participation.
No, what doesn't help is that the new builds aren't nearly enough. If they were quantitatively sufficient, it wouldn't matter if they all targeted the high end, because the people moving in to it would be pulling demand away from other existing units, with a ripple effect across the whole market.
What many people don't realize is how badly the total housing inventory has fallen behind what is needed for the population since the Great Recession.
It absolutely helps - people who move to high end housing free up other, cheaper apartments (recent economic paper has clearly showed that this works, you can easily find it)
What do you mean, they typically get half the assets and a sizable chunk of the other partner’s salary in alimony that they don’t need to give up if they do become employed, and then if childcare is needed typically this would be an extra child support expense that both parties pay for even if the erstwhile stay-at-home parent has full custody.
How would the stay-at-home parent get a bad deal here?
It is definitely doable in the US, and I would imagine most Western countries as well. My knowledge outside of them isn't current enough to speak for the rest.