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I get personal in this episode, in order to ask questions about the nature of what is called the “housing crisis.” Are we all just doom-pilling way too much?As a case study, I talk through the life and history of my parents, and discuss whether or not their life and lifestyle is still available today. I discuss house sizes, mortgage rates, lifestyle choices, lifestyle inflation, and more.Find more content on The Messy City on Kevin’s Substack page.Music notes: all songs by low standards, ca. 2010. Videos here. If you’d like a CD for low standards, message me and you can have one for only $5.Intro: “Why Be Friends”Outro: “Fairweather Friend”AI TranscriptIntroductionWelcome back to The Messy City Podcast. This is Kevin Klinkenberg. I’m going to do something a little different today and just talk without a guest about the topic of housing in particular and how it ties into a few other kind of hobby courses of mine. Why Challenge the Housing NarrativeReally what I want to spend some time doing is taking a contrarian view of how we talk about the so-called housing crisis. And in one sense, this is kind of fun for me to do. One of the things I really loved about my father is when we would have our discussions or debates in the family about various things that were going on, he would often take an opposite view of Almost just for the sport of it. And the truth is, there are a lot of times he was so good at it, you didn’t really know if he felt that way or not. Because he could do really well to argue multiple sides of an argument. And that was really a lot of fun. It was an education for me. It’s something I wish more people would just do generally and try to see an issue from multiple perspectives and try to steel man different perspectives or perspectives that are different from your own. And so I’ve kind of taken to obviously do that if you know me at all.You know I’ve done that a fair amount in my own life. Not nearly as good as my father was at it, but it has been fun to do occasionally. And I really wanted to apply this to the topic of housing. And there’s a couple of reasons for this. And this also ties into a story. I’m going to tell you a little bit of a story about my parents and how they grew up and their trajectory through life, because I think it’s actually very relevant to this topic. And whether or not we have a housing crisis at all in America, or if we do, what is the actual nature of of that crisis. And I want to talk about this because I just see so much online and in person conversation that I just feel like there are too many people, especially too many young people that have been kind of doom pilled on life today and life in America generally.And the thing that I want to start out that I really want to propose to everybody and talk about is the life that my parents had And their trajectory through life is still available today. It is absolutely and unequivocally still available to anyone who wants to choose the life that they lived. And in my opinion, obviously, I knew them really well. In my opinion, they had a tremendous life. They had a great life. They’ve both passed on in recent years. And so I have to talk in the past tense. But by any measure that matters, they had a great life. They lived well into their 80s. They had four kids. We actually all like each other. So it’s not just like a, you know, there are some families where you can say, well, I love my family. But as my brother used to say, or after my dad passed, he would say, you know, that... We didn’t just love our parents, we really liked our parents.And I think if you’re fortunate to be in a family like that, you know a little bit of what I’m talking about. And the four of us as children all... We get along. We’re still all friends with each other and get along. We enjoy being together. We’re all very different people with different interests and different worldviews. In some senses, we had pretty different childhoods, interestingly enough, because there’s a big age spread in our family. So my parents had four kids that they raised. They had a long, stable marriage. They were able to get consecutively better houses as they aged. And then by the time they hit retirement age, they had saved enough money to be able to do other things that they wanted to do. Along the way, they traveled when they wanted to. They really wanted to get out and see the country, see the world.When we were young, that traveling mostly involved just driving around the United States and going to national parks and big cities and seeing the sights. As they got older and had a little bit more disposable income, they would join tour groups and go or sometimes with family to foreign countries and places they really wanted to visit. And I want to give you some context because my parents were not people that grew up with money at all. And I’m going to share some of this because I think it’s important to understand. How they came to be where they were and some of the choices they made and how it might impact choices that young people especially could make today.My Parents’ StoryMy mom grew up very poor. She spent a part of her childhood living in a housing project in Syracuse, New York. And she was one of five kids and they, you know, her whole childhood they never had any money for much of anything. And they often lived in not the greatest part of town, in Syracuse, even when they got out of the housing project. And my dad grew up in a small town in Kansas called Baser, which is just outside the Kansas City area. But at the time when he was growing up, it was a dusty little town of like 600 people. And, again, one of five kids. And his dad was an auto mechanic, had his own garage, but also just, you know, like people do in Little Towns, did a little bit of everything. He drove a school bus. We helped out with the mail. We did a lot of different things in the town. But it’s not like they ever really had any money.My Uncle George, one of my dad’s brothers, used to say that they were all poor, but they didn’t know it. And part of that is the nature of living in a small rural community. They had a lot of spare time and freedom to roam. And so they probably were able to, you know, occupy themselves with a lot of things that maybe other kids weren’t. My mom’s father, my mom’s parents had a really difficult marriage. My grandfather, her father basically worked in a deli in Syracuse and he And so he worked in a Jewish deli. He was a very, very personable guy, made a lot of his own, made his own corned beef and bagels and everything. And a lot of the customers liked him, but it’s not like he ever really made a lot of money. And he and his wife, my grandmother, had a really difficult time, eventually ended up divorcing.And my parents ended up meeting each other in sort of a star-crossed romance that I don’t really have time to tell the entire story. But it ended up that they met when my mom was visiting a friend in Leavenworth, Kansas. And... Not too long after that, a romance ensued and eventually a marriage. My parents were born in 1935 and 36, so they’re not boomers. They’re sort of, I guess, what you would call as greatest generation. But they were too young to be deeply invested in the Great Depression or World War II. They were little kids, really, when all that was going on. So I guess in a sense what you could say is they had the cultural memory of those things. They grew up understanding what life was like in the Great Depression. They grew up poor. They grew up during the war and they knew all that that was going on and they were very well attuned to it, but they weren’t part of it.And I think like a lot of people who grew up in that era, they were really affected, especially by the poverty of what was happening. So one of the things that we used to always say about my mom is she could stretch a nickel like anybody’s business. She was frugal her entire life. And that really came from growing up with next to nothing. And then for many years... After they were married and started having kids, they were living off basically one salary, not like a big salary or anything, for a long time. And so my mom really had to stretch everything to make ends meet. I’m going to come back to the housing part of this because I think there’s some importance to all this.The Housing LadderMy parents got married in 1957, on Christmas Eve of 1957, and then right after that, flew off to Germany. My dad at the time, 21, 22 years old, he had been working a little bit, but he decided he wanted to enlist in the Army, and they spent two years in the Army. He was basically sent off to Germany. And so obviously, you know, late 50s, a great time to be sent off to Germany. No active fighting or anything going on. And they spent two years there. My oldest sister was born in Germany. And then my next sister, I guess you could say, was conceived in Germany. And... And then born back here in the United States when they came back. So by the time they came back to the United States, it’s about 1960, and they’ve got two little kids. And at that time, shortly after they bought their first house, which was in a not so great part of the Kansas City area. It was in Kansas City, Kansas.It was not a terrible area, but not like the greatest. And they bought a small house. And I’ve had some trouble finding out the exact details in this house, but I think it was probably a two or three bedroom with one bath. It’s since been added on to, so it’s hard for me to know exactly. But in this period of time, 1960 or so, that would have been their first house. And, you know, my siblings are just going to really... I want to mock my lack of understanding on some of these details, but I think by the time they left that house, my brother had also been born. So there were three kids there. And I want to trace this trajectory a little bit. There’s a story here that I think we don’t talk enough about that was very common and kind of understood in my parents’ era. Which was the idea of buying a small house. New houses were all generally smaller than they are today.There’s no question about that. We’ve had a lot of growth in the average size of houses. So houses were smaller. But it was also kind of understood that you were going to buy... A small house, you were going to build some equity in that, and then you would eventually buy a bigger house. And as you went through the progression of life, as you could afford more, you would buy more. And I’m not entirely sure how... I see a lot more people who are looking to buy their first house who want it all right away. They want that four-bedroom house at the right price, and they’re unhappy that they can’t get that. I don’t want to overgeneralize, but this was something that was really common, certainly in my parents’ era. So my dad, after he came back from the Army, he ended up working for a company called Wilson Foods. Wilson Foods was a meatpacking company.So at the time, one of what they called, I think, the big five meatpacking companies that were in the United States that dominated the field was, Wilson’s was headquartered in Oklahoma City, but it had plants all over the Midwest. And so he started out as a clerk in the office in Kansas City. So he was on a management track, not on the factory track, but he started at a very entry level position. And then the way it kind of worked in our family and with that company was Again, this was an era where people tended to be a lot more loyal to a certain company. And there was more the idea that you find a good company to work for and you might spend your whole career there. So whenever he wanted a promotion or had the opportunity for a promotion, we typically had to move. So this story is going to sound a little crazy because we moved a lot.And people often thought that we were like a military family, that we were military brats. And we used to say, no, we’re not military, we’re meatpacking. And of course, people didn’t have any idea what we’re talking about, but another just little inside joke we had. So I want to talk a little bit as we trace this and think about house size, but also mortgage rates. Because as we talk about housing availability today, especially for sale housing, we’re really stuck on the conversation about house size and about mortgage rates. Well, I think it’s interesting to look at the trajectory that my parents went through and something very similar to millions of people in that generation today. Went through as they started to move on. So I think it was aboutMortgage Rates in Historical Context1966 or so that we moved to Omaha. Uh, and I went back and I just did some historical, uh, tracking of, uh, mortgage, typical mortgage rates in 1966, the typical mortgage rate was about 6%. So that’s really not very far off from where we are today. Uh, depending on what you’re looking at today, A lot of the standard kind of 30-year mortgage rates are around 6.5%. It fluctuates from week to week, month to month, but we’ve kind of been in that zone now for two or three years. And the conversation is very much about how high the mortgage rates are. Um, because we had such a sustained period of very low mortgage rates, such that people like myself, when, uh, we purchased and we, when ultimately refinanced our house in 2021, I think our mortgages, our rate is like 2.75%. So we had millions and millions of mortgages at like 3% or under. And then obviously the rates, uh, went up dramatically.Uh, they went up very, very quickly. Some of the quickest in history. And they’ve more or less settled into where they are the last two or three years, which is about 6.5%. But again, if you look back historically, one of the stories you can tell is that 6.5% is not like an unusually high mortgage rate. It’s just not. You know, I know nobody wants to pay more than, you know... And so why don’t I track here, just by way of example, some of the moves my family made. 1966, that more average mortgage rate was about 6%. In 1970, we moved from Omaha to Dell City, Oklahoma, which is a suburb of Oklahoma City. And the average mortgage rates then were closer to 8%. In 1972, we moved to Oklahoma City itself, and the rates came down a little bit, about 7.4%. In and around 1973, then we moved to Overland Park, Kansas, and mortgage rates had gone up again, a little bit more, closer to 8%.In 1975-ish, maybe 76, we moved to Albert Lee, Minnesota, where there was a meatpacking plant that my dad became the superintendent for. So this started an era where mortgage rates were really rough. So in 75, the average rate was about 9%. It went up from there. You know, in 1980, it was over, in 1980, it was almost 14%. 1984, my parents were able to, my dad was able to get a job in Marshall, Missouri. So we left Albert Lee and moved to Marshall. 84, it was still 13.88% average mortgage rate. And then by the end of that decade, 1990 had come down to about 10 and a quarter percent. And then 94, my parents, right around that period where my parents, um, Bought their final house in Lenexa, Kansas in their retirement. They weren’t quite retired yet. That’s a different story. But in 94, it was about 8%. And so there was a little blip again in 95 or so is about when I bought my first house.That was about eight and a half percent was a typical rate. And then it kind of went on a straight line down more or less from 1995 till about 2021 down to about that three percent rate. And so, again, this is kind of, you know, it’s a bit of a long story. But if you can trace these things historically, you can see that the expectation of paying a six, six and a half, seven percent interest rate is just historically not that high. Now, I know historic doesn’t matter when you’re trying to buy a house today and they’re not as much churn in the housing market. But I mean, that’s just part of the reality that many, many families paid much higher mortgage rates. Now, what abou…
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