Name: I Analysed The Housing Market, Its Far Worse Than You Expect
Uploaded: 2025-07-18T19:05:56.000Z
Duration: 30 min 36 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

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House prices are completely out of control.

If you can't buy a house, it's not your fault.

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Because the government, together with wall street, over the last 25 to 30 years have been consistently destroying the housing market, to the point where house prices got out of control.

And the only way to get out of it is to have a massive housing crash.

If you think I am exaggerating and it sounds like a conspiracy theory, let me explain step by step what exactly is happening.

So give this video a thumbs up and let's dive right into it.

Back in 1980s, the median house price was around 55 to 60 thousand dollars, while the median income was 18 thousand dollars.

If you adjust that to inflation, then it's around 60 thousand dollars, or probably more 58 thousand dollars to be more accurate.

And over time, house prices have been consistently growing.

But the only reason the price of anything would grow, if there is demand for it.

If people are making more money, people would be buying more houses, and the price of houses would continue to grow.

But if you compare the median house price historically compared to the median household income, you will see a very clear trend, that over time, houses simply became too expensive while people cannot possibly afford them.

Back in 1980s, the median house price was an equivalent to 3 household incomes.

That means that 3 years of household incomes would equal to a single house.

Yes, houses are still expensive at that rate, but still, it is possible for most people to afford a house.

You can save that money, get a mortgage, and somehow be able to afford a house.

If you compare that to today, to 2025, that ratio has grown 7 to 1. 7 household income today would equal to a single house if you take the median income and the average price of the house.

If you look at these two graphs closely, you will see a very inconsistent pattern.

For example, in the early 2000s, house prices have been continuously growing.

However, if you compare that to median household income, incomes have been going down.

In the early 2000s, the dotcom bubble burst and the entire economy is crushed.

People's income began to fell, which means that people should not be able to afford a house.

But suddenly if you see it, house prices have been increasing since the early 2000s.

That doesn't make sense because people are earning less money, which means that the demand for houses should go down, which means that house prices should not be rising this fast.

Another example is after the 2008 financial crisis.

You see a huge sharp in the incomes of people.

However, house prices did not suffer that much and they quickly recovered.

And it took much longer, for example, for incomes to go back to the exact level of 2008.

In 2020, you can see a very clear pattern that the median income began to fell down.

Because people are sitting in their homes, people are not making as much money, and a lot of people lost their jobs.

On one side, the stock market was growing and there were plenty of opportunities.

On the other side, a lot of people were forced to not leave their houses in order to prevent the disease from spreading all across the country.

That should be a very logical sign that demand for a lot of products would go down as well.

Houses are not cheap, houses are expensive, and nobody would risk buying a house when they don't have the money to buy that house in the first place.

But if you look at house prices, suddenly you see a huge increase in the price of houses to the point that most people could not even comprehend what exactly is happening.

And this inconsistency between the price of the house and the median income led to the fact that today most people cannot possibly afford a house.

The median income today is around $75,000.

After taxes, it is going to be around $60,000.

Which means that on average, the average household is making $5,000.

Now this is not individual income, this is household income.

If you save 20% of your income, it is going to be $12,000 a year.

And it will take you 35 years to save for a single house.

There is no way you can save your money to buy a house.

Especially by the time you are going to save your money, house prices won't just double in 35 years, they will triple.

So the money that you have saved will worth absolutely nothing.

The only way for anybody to buy a house is a mortgage.

So let's take the median house price today, which is $417,000.

Assuming that you are a responsible buyer, you will put a 20% down payment, I mean, without that nobody is going to give you a house or a mortgage.

After a $20,000 payment and a 30-year mortgage and 7% interest rates or a mortgage rate, because mortgage rates today are between 6-7%, your monthly payments will total to $2,500.

That means that more than half of your income is directly being paid for your mortgage in order to have a roof over your house.

And if you know anything about owning a house, especially those who are watching this video, and know that owning a house isn't just about your mortgage payments.

It's about renovations, it's about utility bills, it's about consistently something breaks down.

And there is a lot of more cost that comes with buying a house.

Which means that something between 60-65% of your entire income would go into the house assuming that you are going to get a mortgage and you are on the median income and you will buy the median house.

If you look at individual cases in particular cities where house prices have doubled or tripled and have gone much farther than the chart that I have showed you, it is insane, it's impossible for anybody to buy a house in those places.

But even if you take the average across the country, the math does not make sense.

Based on this math, nobody can afford a house, if we take the average joe, if we take the average American.

But if you take a look at this graph, you suddenly see a very clear pattern, and you find out the answer to the question.

M2 money is the amount of money that exists in the economy.

But this isn't just the physical cash that exists, but all the money that exists in banks accounts, in savings accounts.

And over the last 60 to 70 years, the amount of M2 money has been growing exponentially, especially if you pay attention at the early 1990s.

So if you look at the M2 money pattern and you see it at house prices, suddenly you see that house prices have been consistently growing alongside of M2 money.

If you increase the money supply, asset prices sooner or later have to reflect the amount of money that exists in the economy.

And that's why house prices have been growing exponentially.

However, that doesn't mean that your income is going to reflect the M2 money.

Even if the money supply is growing, that does not obligate your boss to increase your paycheck.

That does not obligate your company to pay you money.

But asset prices will start reflecting the amount of money that exists within the economy.

And a very clear example is the 2008 financial crisis.

And you see that the median income started going dramatically down.

Yes, house prices for a short period of time dropped, however, they recovered very quickly.

And that's because during the 2008 financial crisis, M2 money didn't just shrank but actually it increased exponentially.

So the real question is that, why did we increase suddenly the amount of M2 money in the economy?

What exactly has happened over the last 30 to 40 years that M2 money began to exponentially grow to the point where asset prices had to adjust, but nobody obligates businesses to raise your income alongside the increase of M2 money.

At the end of the day, what drives the price of anything is demand and supply.

If there is a strong demand for anything, the price of that thing is going to increase.

If everybody today would want to buy iPhones, Apple can increase their prices knowing that people are ready to pay for that.

On the other side, if people are not ready to pay for anything, the price of that thing is going to go down.

So the only reason that house prices went exponentially high is for some reason all this time there was such a strong demand for these houses.

On the other side, there is the supply side.

If businesses see an opportunity that there is a strong demand for houses, don't you think that a lot of people would jump into the opportunity to build those houses, to provide those houses to the people who are ready to buy them?

And that's why when you have a capitalistic economy, when you have a free market, you don't have to worry about it.

Even if there is going to be a financial crisis, even if the market is going to crash, you know for a fact that the market is going to adjust itself.

When on the other side, the suppliers would see that there is not a strong demand for houses, suppliers are not simply going to build those houses.

So you don't have this exponential rise in prices.

The problem is that when you start messing up with supply and demand, that is when you get a real problem.

And that's exactly what government and wall street have been doing since early 1980s and 90s.

Once upon a time, the government decided that they want to help the average American.

It's very rare to think that politicians really want to help the average person, but how can they help them?

So the government decided that we will try to help the poor people to buy a house by helping them to get a much lower mortgage rate.

If you can get a lower mortgage rate, I mean, you can't afford that house in the first place, but you probably make $3,000 a month, $5,000 a month.

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I Analysed The Housing Market, Its Far Worse Than You Expect

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