You are too broke to own a home in America! The typical American household making $50,000 a year cannot afford to purchase the typical $200,000 median priced home without straining their budget.

Housing values far outpacing overall inflation and income gainsThe housing market is quickly outpacing any sort of normal inflationary gains. The BLS CPI measure of course is missing the entire jump from last year because it is focused only on what a home would yield in rent. This is a poor measure but then again, this missed the previous housing bust. 

Housing will consume the biggest portion of your income regardless of you being a renter or an actual home owner. Owning a primary residence is not an investment! An investment usually kicks money back your way instead of draining it out of your wallet. Of course there is so much propaganda on owning that people continue to buy even if prices are far beyond their reach.

That is interesting. According to the CPI we are up 38 percent since 2000. So why are housing prices going up nearly twice the rate of the CPI? Thanks to our current financial system debt is the currency of choice from banks and the system is flooded with easy money. The only problem of course is that banks and investors are crowding out regular buyers in this new market because U.S. households have seen no inflation adjusted wage growth for nearly a generation:

I think it is critical to understand what is going on here and that is housing is becoming unaffordable to many throughout the country. Many will take on debt and put every extra penny into their property. They forget to plan for retirement or to save for things outside of housing. This is why we now have an impending retirement crisis on hand. Say you now pay off your home. Great. You still have insurance, taxes, and maintenance forever! Where is your income going to come from in retirement? Certainly not your home unless you sell but then you still need shelter. Most people don’t think this far out and are betting that Social Security will be there for 10, 20, or 30 years of their retirement and will provide them with enough to comfortably get by. That is not going to be the case. The fact that housing values jumped in 2013 because of investor money and regular buyers are out of the market should tell you something else. Most Americans are too broke to buy. Of course many will go into massive debt trying to cling on to the fading ideals of the American Dream. You need to run the numbers carefully and realize that owning a home is not a clear cut decision.

1 in 4 US renters must use half their pay for housing costs

Since the end of 2010, rental prices have surged at nearly twice the pace of average hourly wages, according to data from the real estate firm Zillow and the Labor Department. 

The crisis reflects one of the shortcomings of the recovery from the Great Recession: Income has failed to match rent increases. At the same time, construction has failed to keep pace with demand from renters. The recession pushed more millennials, former homeowners who faced foreclosure and low-wage workers into rental housing. 

More than 30 percent of renters in California, Florida, New Jersey and New York state devote at least half their incomes to housing and utilities, according to the analysis. Other than Alaska, South Dakota and Wyoming, at least 20 percent of renters in every state face similarly high costs relative to income. 

Construction firms are building apartment complexes at an annual pace of roughly 321,333 this year, according to the Commerce Department. The rising rental prices suggest that construction hasn't kept pace with demand, according to economists.

DYI