Realtor shares how housing costs have drastically increased over the past 40 years

We have all heard about the woes of inflation and how living costs are suffocating people. Salaries that used to be considered well-paying a few years back are just not enough today. More importantly, this economic effect has resulted in making it close to impossible for most individuals to own a home, which is a basic necessity. Freddie Smith—who goes by @fmsmith319 on TikTok—has recently made a viral comparison video summarizing how housing has changed in the past 40 years.

The man wastes no time giving his viewers the data and begins by comparing housing costs from when boomers were in their 30s to what millennials are paying today. He chooses rates from the 1980s, 1990s, 2000s and finally, 2023 to provide a comparable idea of how much prices have increased over time. He then elaborated on the average interest rates, approximate monthly payments, median income and finally, what percentage of the income would be consumed by the mortgage. The influencer has also accounted for people who lived in rented properties and added payment details for that as well.

It's fairly easy to notice the drastic increase in mortgage payments over the years, even with a steadily increasing average household income. According to the data, he discovered that boomers, regardless of when they were born, were spending 18% of their income on rent or housing. He even accounts for boomers in the 1980s who faced higher interest rates and spent 25% of their income on housing. Reflecting on this, he says, "So you felt a little pressure."

However, the biggest advantage for boomers was that they could choose not to buy a house and rent, only having to pay 14% of their income on housing. After having covered rough estimates for boomers across three decades, Smith talks about the current housing economy for millennials in 2023. He says, "The average home is $436,000, the average rent is $2000 and the interest rate is 7.5%. You couldn't even qualify for this house, by the way."

He reveals that in 2023, people would have to give out a staggering 36% of their household income to own a house. Even if they were to go for the option of taking a rented property, they would have to pay 29% of their income. These numbers showcase just how much the cost of living has changed and basic necessities like housing have become a luxury for many people. Individuals on the social media platform were intrigued by the creator's video and put their thoughts down in the comments section.

@kaygieeeee21 said, "My mom bought her first house in 1997 for 128K; she sold it a few years later. Now the same house is 988K." @smil3yj3nn shared, "I was taught never to spend more than 30% on housing. Guess that cardboard box is looking like home." @crossstitchkitties commented, "Yep. In Australia now, spending 30% of your income on a mortgage is seen as the norm. That's a serviceable loan." If nothing changes, people will either be forced to rent out or take exorbitant loans that they end up repaying for their whole life.