>But we’re constructing a rigorous hypothetical around modern averages.
We wanted to get the average house on the average income, right? How
come the average salary entitles you to a property that is worth ⅓ of
the average house?
And here is the problem. His entire calculation is based on a fallacy. A first time buyer is not an average buyer. They shouldnt be aiming at an average house, they should be aiming for the first rung on the ladder, which is whatever is cheapest.
The average buyer will likely have been paying a mortgage for years. This money doesnt dissapear like when renting, this money is stored in the value of their current house (minus interest to the bank). They pull this money out by selling their current house in order to afford a better house, thus moving up the ladder.
The OP even points to cheaper options, but then discards them to suit his use of ‘average’.
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>But we’re constructing a rigorous hypothetical around modern averages.
We wanted to get the average house on the average income, right? How
come the average salary entitles you to a property that is worth ⅓ of
the average house?
And here is the problem. His entire calculation is based on a fallacy. A first time buyer is not an average buyer. They shouldnt be aiming at an average house, they should be aiming for the first rung on the ladder, which is whatever is cheapest.
The average buyer will likely have been paying a mortgage for years. This money doesnt dissapear like when renting, this money is stored in the value of their current house (minus interest to the bank). They pull this money out by selling their current house in order to afford a better house, thus moving up the ladder.
The OP even points to cheaper options, but then discards them to suit his use of ‘average’.