How Valuable Is All the Housing in America Combined?

A blog about business and economics.
Dec. 19 2013 9:11 AM

How Valuable Is All the Housing in America Combined?

57176668
Getting bigger all the time

Photo by Scott Olson/Getty Images

When the English-language version of Thomas Piketty's Capital in the Twenty-First Century drops, it's going to be a big deal for the inequality debate. But the book is also just jampacked with fascinating historical facts that are interesting for a wide range of issues. And most of the data is up here for public consumption if you don't mind reading a little French.

Here's a chart I made that doesn't appear in the book based on the data that is there. It aggregates the value of all residential housing in the United States of America as a share of annual national income:

Income
Advertisement

There's an interesting sawtooth pattern here, but basically it's up, up, and away. National income is much higher in 2010 than it was in 1910 (the population has more than tripled in size and there's been massive per capita growth), but the value of America's housing stock has grown much faster than national income. What's unfortunate is that we don't seem to have a way to distinguish between the value of the land that the residential housing occupies and the value of the structures that have been built on the land.

One interesting point to note about this is that we have a lot of rules of thumb about what constitutes reasonable household-level spending on residential housing. Those are ideas about what rent-income ratio is "affordable" or what size mortgage it's reasonable for a person to take out. The long-term view shows that in the real world residential housing has steadily become a bigger and bigger share of the economy and there's probably no timeless wisdom you can exactly impart about it.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Politics

Don’t Worry, Obama Isn’t Sending U.S. Troops to Fight ISIS

But the next president might. 

The Extraordinary Amicus Brief That Attempts to Explain the Wu-Tang Clan to the Supreme Court Justices

Amazon Is Officially a Gadget Company. Here Are Its Six New Devices.

The Human Need to Find Connections in Everything

It’s the source of creativity and delusions. It can harm us more than it helps us.

How Much Should You Loathe NFL Commissioner Roger Goodell?

Here are the facts.

Altered State

The Plight of the Pre-Legalization Marijuana Offender

What should happen to weed users and dealers busted before the stuff was legal?

Surprise! The Women Hired to Fix the NFL Think the NFL Is Just Great.

You Shouldn’t Spank Anyone but Your Consensual Sex Partner

Moneybox
Sept. 17 2014 5:10 PM The Most Awkward Scenario in Which a Man Can Hold a Door for a Woman
  News & Politics
Weigel
Sept. 17 2014 7:03 PM Once Again, a Climate Policy Hearing Descends Into Absurdity
  Business
Business Insider
Sept. 17 2014 1:36 PM Nate Silver Versus Princeton Professor: Who Has the Right Models?
  Life
Outward
Sept. 17 2014 6:53 PM LGBTQ Luminaries Honored With MacArthur “Genius” Fellowships
  Double X
The XX Factor
Sept. 17 2014 6:14 PM Today in Gender Gaps: Biking
  Slate Plus
Slate Fare
Sept. 17 2014 9:37 AM Is Slate Too Liberal?  A members-only open thread.
  Arts
Brow Beat
Sept. 17 2014 8:25 PM A New Song and Music Video From Angel Olsen, Indie’s Next Big Thing
  Technology
Future Tense
Sept. 17 2014 7:23 PM MIT Researchers Are Using Smartphones to Interact With Other Screens
  Health & Science
Bad Astronomy
Sept. 17 2014 11:18 AM A Bridge Across the Sky
  Sports
Sports Nut
Sept. 15 2014 9:05 PM Giving Up on Goodell How the NFL lost the trust of its most loyal reporters.