Effects of dual income households on housing affordability

The results will not reflect correctly. RFD in this forum, is full of old timers.

As for myself, my 1st home was 25 years ago, when it was cheaper, could be affordable by one income, now is different story.

cptsykes wrote: ↑ I came across an excerpt from the book by Elizabeth Warren (US Senator). Arguments she made are quite convincing. I am planning to read the book but before that I wanted to do an unscientific poll to gather some Canada specific data points.



I am looking forward to anecdotal inputs from mortgage brokers as well to get ground realities or anyone familiar with any Canada specific studies.

Thanks in advance for participating!

PS: Let me be clear I or the book is not advocating for women to stay home as a solution for housing crisis so please let's keep the gender politics out of this and focus on the problem.

I've said this so much that I stopped bothering to say it anymore.

In the 70s and 80s, most households weren't dual incomes. Some were, but mostly, mothers stayed home with the kids. The result is that every household had less money to go around, so things like house prices were significantly lower.

Now, we live in a largely fully mobilized economy. Every married couple brings in two incomes. So, in the 80s where you might have had the equivalent to one man making 100k (thus the household), now you have two earners making a combined 200k. So, going to market with housing, prices are going to double just on the face of it. It's game theory 101. Everybody is earning more, so nobody is earning relatively more.

I'm not sure how to vote - we withdrew the amount we needed for a downpayment from our RSP for our first home under the first time home buyers home plan. That was 20 years ago though.

Most of my social circle bought in the early-mid 2010's in the GTA. All of us were dual income at one point and had help either directly with the down payment as a gift or saved while living with parents for free. Half of us also settled for a place smaller or older than the homes we grew up in.

teoconca wrote: ↑ The results will not reflect correctly. RDF in this forum, is full of old timers.

As for myself, my 1st home was 25 years ago, when it was cheaper, could be affordable by one income, now is different story.

Absolutely results will have bias due to demographic make up of this forum but don't let that stop you from voting. This is the sort of data Stats Canada should've been tracking and publishing so that first time buyers can make educated decisions on where and how much to stretch their budgets to buy a home. Its unfortunate whenever discussion on housing affordability is brought up fringe politicians advocate for knee jerk policies and find some boogeyman to blame. Last couple of years it were foreign buyers and this year its institutional investors buying SFD homes by thousands.

danfromwaterloo wrote: ↑ I've said this so much that I stopped bothering to say it anymore.

In the 70s and 80s, most households weren't dual incomes. Some were, but mostly, mothers stayed home with the kids. The result is that every household had less money to go around, so things like house prices were significantly lower.

Now, we live in a largely fully mobilized economy. Every married couple brings in two incomes. So, in the 80s where you might have had the equivalent to one man making 100k (thus the household), now you have two earners making a combined 200k. So, going to market with housing, prices are going to double just on the face of it. It's game theory 101. Everybody is earning more, so nobody is earning relatively more.

Yes that's my intuition as well and the thesis of the book https://www.amazon.ca/Two-Income-Trap-E ... 0465090907 but still housing unaffordability comes up at least once a day every day when you turn on a news. Govt should publish stats to dispel myths and not let fringe politicians, shady realtors and investors exploit masses for their bottom-line.

queentasha wrote: ↑ I'm not sure how to vote - we withdrew the amount we needed for a downpayment from our RSP for our first home under the first time home buyers home plan. That was 20 years ago though.

That still counts as your savings so you can say you were dual income(?) saved for down payment and became eligible for mortgage based on both of your income.

cptsykes wrote: ↑ Yes that's my intuition as well and the thesis of the book https://www.amazon.ca/Two-Income-Trap-E ... 0465090907 but still housing unaffordability comes up at least once a day every day when you turn on a news. Govt should publish stats to dispel myths and not let fringe politicians, shady realtors and investors exploit masses for their bottom-line.

Who is getting exploited? Everyone selling is happier than ever and everyone buying is happy as well...I dont see many whining with all the money in their pockets from their sales. Maybe I am misunderstanding what you are saying I am curious how are realtors and investors exploiting the masses?

atom2020 wrote: ↑ Who is getting exploited? Everyone selling is happier than ever and everyone buying is happy as well...I dont see many whining with all the money in their pockets from their sales. Maybe I am misunderstanding what you are saying I am curious how are realtors and investors exploiting the masses?

I was mainly referring to first time home buyers. They are the ones getting exploited and I am not only talking about monetary exploitation that's just one aspect.
I don't want to name names but I mention realtors, investors and politicians for following reasons,

Realtors:
Few realtors who have created quite a following on twitter by spreading FOMO and may have pulled the demand forward by many quarters.

Investors:
Same with outspoken investors who are peddling alternative risky investments because housing is out of reach for many.

Politicians:
Paying lip service and building platform on housing unaffordability for upcoming election.

Not all realtors, investors and politicians are bad but there are few bad apples and you'd know who I am talking about if you are active on Twitter, YouTube or any other social media.

submarine wrote: ↑ Most of my social circle bought in the early-mid 2010's in the GTA. All of us were dual income at one point and had help either directly with the down payment as a gift or saved while living with parents for free. Half of us also settled for a place smaller or older than the homes we grew up in.

Half? That's pretty good!

My group i'd say is 13 of 15 in lesser homes than what we grew up in. Mid 40s age.

Includes multiple corporate HQ managers, 3 doctors, teachers, so it's always bit surprising.

The 2, one married money, the other owns a business.

The GTA eats it's young and will continue to.

cptsykes wrote: ↑ I was mainly referring to first time home buyers. They are the ones getting exploited and I am not only talking about monetary exploitation that's just one aspect.
I don't want to name names but I mention realtors, investors and politicians for following reasons,

Realtors:
Few realtors who have created quite a following on twitter by spreading FOMO and may have pulled the demand forward by many quarters.

Investors:
Same with outspoken investors who are peddling alternative risky investments because housing is out of reach for many.

Politicians:
Paying lip service and building platform on housing unaffordability for upcoming election.

Not all realtors, investors and politicians are bad but there are few bad apples and you'd know who I am talking about if you are active on Twitter, YouTube or any other social media.

I guess most of the people I actually see complaining about housing affordability are the ones who are looking at something completely unattainable, people who won't move farther for what they want, or won't settle for something smaller or in a less desirable area without having to move farther. Even yesterday on the Canadian housing crisis group one of the leads said "but now that it's starting to affect middle class white folks, people are starting to take notice." When you look at immigrants you will notice they have accepted housing affordability issues for years and just settled for condos or another property type or moving farther away. Regardless of what country they immigrated from there were barriers in place for home ownership. It seems to me that now that some privileged people are facing what immigrants have for years they think its an issue. I have a very hard time empathizing with folks who have sufficient downpayment for a property but simply won't settle for anything less than their dream neighbourhood or forever home. These people also have no regard for any other social issue and name the housing crisis as the number one social issue in Canada, yet won't ever step up for people who are legitimately living in poverty.

I actually have found more realtors and investors on social media who sincerely want to help people achieve home ownership and feel many of them are providing free education. I have very high regards for some of them - Mark Loeffler an absolute gem, Andrew Hines, Sarah Labri, Susan Livermore, Alex Wilson, Jordon Schrinko from PreCondo, Tom Story, Nasma Ali and my absolute favorite the Toronto Real Estate Show (TK and Darryl). Sure there will be some people out there giving misinformation but there is still a lot of goodness and people who simply want to inspire others.

atom2020 wrote: ↑ I guess most of the people I actually see complaining about housing affordability are the ones who are looking at something completely unattainable, people who won't move farther for what they want, or won't settle for something smaller or in a less desirable area without having to move farther. Even yesterday on the Canadian housing crisis group one of the leads said "but now that it's starting to affect middle class white folks, people are starting to take notice." When you look at immigrants you will notice they have accepted housing affordability issues for years and just settled for condos or another property type or moving farther away. Regardless of what country they immigrated from there were barriers in place for home ownership. It seems to me that now that some privileged people are facing what immigrants have for years they think its an issue. I have a very hard time empathizing with folks who have sufficient downpayment for a property but simply won't settle for anything less than their dream neighbourhood or forever home. These people also have no regard for any other social issue and name the housing crisis as the number one social issue in Canada, yet won't ever step up for people who are legitimately living in poverty.

I actually have found more realtors and investors on social media who sincerely want to help people achieve home ownership and feel many of them are providing free education. I have very high regards for some of them - Mark Loeffler an absolute gem, Andrew Hines, Sarah Labri, Susan Livermore, Alex Wilson, Jordon Schrinko from PreCondo, Tom Story, Nasma Ali and my absolute favorite the Toronto Real Estate Show (TK and Darryl). Sure there will be some people out there giving misinformation but there is still a lot of goodness and people who simply want to inspire others.

I respect that but Its not fair to compare recent immigrants to people who grew up here and who have far higher baseline and are emotionally attached to neighborhoods they grew up in.

I don't want to derail this thread further by comparing with immigrants but what I wanted to discuss was the central topic of the book - "Two Income Trap", Are the first time buyers feeling trapped because they stretched their budgets to keep up with other dual income households? The book was written in 2004 and was kind of ominous of 2008 housing crisis in the US. Are we going down the same path? How many households are feeling that way?

GTA12345 wrote: ↑ Half? That's pretty good!

My group i'd say is 13 of 15 in lesser homes than what we grew up in. Mid 40s age.

Includes multiple corporate HQ managers, 3 doctors, teachers, so it's always bit surprising.

The 2, one married money, the other owns a business.

The GTA eats it's young and will continue to.

That's my observation as well. Lot of my circle about half have stepped down and compromised on size of the home or location while other 25% or so have stretched their budget via parents gift to unsustainable level. Appreciate the data point!

cptsykes wrote: ↑ I respect that but Its not fair to compare recent immigrants to people who grew up here and who have far higher baseline and are emotionally attached to neighborhoods they grew up in.

I don't want to derail this thread further by comparing with immigrants but what I wanted to discuss was the central topic of the book - "Two Income Trap", Are the first time buyers feeling trapped because they stretched their budgets to keep up with other dual income households? The book was written in 2004 and was kind of ominous of 2008 housing crisis in the US. Are we going down the same path? How many households are feeling that way?

I highly suggest you reflect on what you just said. Essentially you are saying people born here have more emotional attachment this screams racism. Basically you are saying people born here are more deserving. I was born here and I never think that way period. This is the problem with the movement it lacks any inclusiveness and is downright racist, not only that they lack insight into the intersectionality of barriers people face based on socio economic class, gender, race, and so on. The people furious about housing certainly have no care about the homeless or those who are facing poverty. It is actually one of the most INTOLERANT social movements I have ever observed. What you just stated sounds like saying well since we are born here we have more rights to this land and area, please don't forget the indigenous people when you do actually learn to socially locate yourself. Strongly suggest you read the Invisible knapsack by Peggy McIntosh and educate yourself on privilege.

Also if you dont want to leave your "land" go buy a condo or a property type you can afford! Rather than complain that you can't get a sfh. There are still plenty of opportunities to own property in Toronto under 1 million dollars even under 700k but it may not be the neighbourhood you want and oh you may also have to live near immigrants. What do you want exactly: "My parents live in high park that means I deserve to live in high park its the neighbourhood I grew up in." That is not how it works. Good luck getting the government to agree with you and change policies based on such reasoning. Its also ironic because the same groups advocating for such changes want nothing more than for boomers to move away leave their houses and for seniors to go to LTC to increase housing inventory - they talk about this at length! So don't those people deserve to stay in their neighbourhoods by your logic.

I should be able to afford a 3M home but because of the greed of realtors and stupid government policy so I have to settle for only a 2M one. Can't wait for the big reset.

Joking aside, normally when someone collects data points, theyre trying to validate a hypothesis/guess. What are you trying to understand?

We bought our first home in 2018, only his income and in our 30's and 40's.
And he came to Canada in 2010 with no real savings. He originally wanted to save for the 20% downpayment before buying but I talked him into just doing the 5% down, and it's a good thing we did because if we waited, we would have never been able to buy.

"buy a home that I want to buy"
waterfront mega lot mansion in prime city count?

shouldnt you replace it with "buy a home that I can afford"?

cptsykes wrote: ↑ I was mainly referring to first time home buyers. They are the ones getting exploited and I am not only talking about monetary exploitation that's just one aspect.
I don't want to name names but I mention realtors, investors and politicians for following reasons,

Realtors:
Few realtors who have created quite a following on twitter by spreading FOMO and may have pulled the demand forward by many quarters.

Investors:
Same with outspoken investors who are peddling alternative risky investments because housing is out of reach for many.

Politicians:
Paying lip service and building platform on housing unaffordability for upcoming election.

Not all realtors, investors and politicians are bad but there are few bad apples and you'd know who I am talking about if you are active on Twitter, YouTube or any other social media.

I disagree. They are not getting exploited.
People get exploited when they are getting scammed out of their money, ie, paying high interest rate like 80s. All their money went to bank interest and RE price didn't move.
People now buy expensive RE and they can sell expensive RE later, no money lost, they make money!

Millenial here, the majority of my close friends/network are between 30-38. It just seems to be the "standard" or stereotypical passage of life. Date in your early 20s, marry in your late 20s/early 30s, buy a condo, settle down, upgrade to a larger condo/TH/detached, have kids, etc.

How does it compare to previous generations? Well, it's more than just a financial decision. No one in my close network wanted to be a parent in their early 20s, and I only know of a few that actually did so from my graduating class of 300. Almost everyone prioritized going out, traveling, working on their careers, etc. For the majority, it's only around the age of 30-35 when serious family planning started happening.

Comparing and lamenting what we have vs. what our parents had (and in turn, what we had as children), I think that's the definition of entitlement and privilege. I grew up in a multi-generation household, 3 adults + 2 kids split between 3 bedrooms and 1 bathroom. 1000sqft. All I hear now are complaints that you can't raise a family with 2 bedrooms & 2 bathrooms, 800sqft. Went on 2 family vacations over 20 years. I learned that life was tough and life doesn't owe anyone anything. Just because I had something as a child, or my parents could (or could not, in my case) afford doesn't mean that I should feel like I should have the same things. I grew up with nothing so this is my mentality. Maybe it's different if you grew up with everything you wanted, or had that stereotypical Hollywood childhood, waking up on Christmas morning to find the new Nintendo under the Christmas tree, and being able to play video games in your rec room in the basement.

Is it more difficult to afford housing in Canada vs. before? Absolutely, but Canada (and the world) is completely different than before. Canada is seen as a developed country, but we are still an infant on the global scale. No one recognizes how lucky the previous generations were since they were amongst the first ones here and bought "low". What we are seeing happening today, has already happened countless times in older countries.