The <100% pay differential between California and somewhere in the Midwest does not explain the >500% difference in housing prices. You are leaving out numerous factors including demand, supply, and local regulations.
> <100% pay differential between California and somewhere in the Midwest does not explain the >500% difference in housing prices
Curiously, 20% down implies 5x leverage. Not saying that's what's causing the difference. But in the weird way leveraged finance works, a <100% income difference can absolutely fuel a 5x asset price gap.
Imagine two people. One person makes 50k the other makes 100k. Both have expenses for food, tech, schools etc at 40k. This leaves 10k vs 60k to spend on housing. >500% difference.
