Want to understand why the Massachusetts housing market is broken? Look at this chart.
'The gap between what people make and what homes cost is completely outrageous,' said Albert Saiz, an associate professor of urban economics and real estate at the Massachusetts Institute of Technology. 'And this data does not even represent the situation for working-class families who are making minimum wage. A large portion of the state's population cannot afford to buy a home here, which is not how a housing market is supposed to function.'
Economists consider the ratio of home prices to incomes to be a reliable indicator of the state of a housing market. Typically, a house-price-to-income ratio of three — a median household income of $100,000 and median home price of $300,000, for instance — is seen as healthy.
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In Greater Boston in 2023, that ratio was 6.3, according to Harvard's Joint Center for Housing Studies, more than double that healthy rate.
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It wasn't always this way. In the 1980s, the region's house-price-to-income ratio hovered around
three, before beginning a slow ascent leading up to the 2000s, when it began to climb rapidly.
An apartment building under construction in Revere in 2023.
David L. Ryan/Globe Staff
The last time the price-to-income ratio here was this high was in the mid-2000s, in the lead-up to the housing market crash that spurred the Great Recession.
The force behind the growing gap between incomes
and prices is
The rise in home prices is not just about how many homes the state builds each year, said Keren Horn, an associate professor of economics at UMass Boston. It is also about the kind of homes developers build.
For decades, builders here built smaller, relatively affordable 'starter homes' in the suburbs of Boston. Today, most single-family homes that are built are larger
'McMansions,' in many cases on the lots of older starter homes that are torn down to make way. That trend is partially related to the high cost of land, especially in Greater Boston, but it contributes to rising house prices nonetheless.
'We're seeing decades and decades of bad housing policy catching up to us,' Horn said. 'Housing is supposed to be affordable to the people who need it. We can't expect to have a healthy region if the current price trajectory continues.'
The soaring price tags for homes wouldn't matter quite as much if incomes were keeping pace, but they haven't. From 1987 through 2022, the median income in Massachusetts grew by roughly 190 percent, while the price for the typical single-family home grew by close to 300 percent.
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Housing has always been expensive in Massachusetts, by national standards. But Massachusetts, especially Greater Boston, also has higher incomes than most of the rest of the country. Still, now, to afford the typical house here, a household needs to earn roughly $217,000 a year, according to Harvard's housing center.
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What the yawning gap between house prices and incomes amounts to is, effectively, a change in who can hope to own a home here. In the 1980s and before, when incomes and home prices were in sync, homebuying
was an accessible tool of wealth-building for the working and middle classes. Many families who bought in those days have seen their home values double, triple, or even quadruple, becoming an asset for younger generations.
That same pathway to generational wealth is now far more difficult to access. That leaves many average earners in younger generations two options: rent, seemingly forever, or leave the state.
'We are going to witness a huge generational divide, in terms of access to wealth,' Saiz said. 'Or people are just going to find somewhere else to live.'
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Forbes
14 hours ago
- Forbes
These 26 Rich Private Colleges Just Got A Tax Cut From Republicans
S trange things happen when details of a massive tax and budget bill, like the one President Donald Trump signed yesterday, are tweaked behind closed doors. Among them: A couple dozen of the nation's wealthiest small private colleges will be getting a tax cut next year, even as bigger rich universities, including Princeton, MIT, Yale and Harvard, will be slammed with higher taxes. It all began as an effort by House Republicans to dramatically raise the excise tax imposed on the earnings of college endowments, and particularly the endowments of wealthy 'woke' schools like Harvard University that they (and President Donald Trump) have targeted. But as it turns out, while Harvard's tax bill will likely more than double, some smaller schools with famously left-leaning student bodies (e.g. Swarthmore College and Amherst College) are getting tax relief. That's because schools with fewer than 3,000 full-time equivalent tuition-paying students will be exempt from the revamped endowment tax beginning next year. It currently applies to private schools with more than 500 full-time equivalent tuition-paying students and endowments worth more than $500,000 per student. Using the latest available federal data from fiscal year 2023, Forbes identified at least 26 wealthy colleges that are likely subject to the endowment tax now, but will be exempt next year based on their size. Along with top liberal arts schools like Williams College, Wellesley College, Amherst and Swarthmore, the list includes the California Institute of Technology, a STEM powerhouse, and the Julliard School, the New York city institution known for its music, dance and drama training. Grinnell College in Iowa, which enrolled 1,790 students in 2023, will save around $2.4 million in tax each year as a result of the change, President Anne Harris said in an email to Forbes . Here's what happened. As passed by the House in late May, the One Big Beautiful Bill (its Trumpian name) increased the current 1.4% excise tax on college endowments' investment earnings to as high as 21% for the richest institutions—those with endowments worth more than $2 million a student. (While these schools are all non-profits and traditionally tax exempt, the 1.4% tax on investment earnings was introduced by Trump's big 2017 tax bill. According to Internal Revenue Service data, 56 schools paid a total of $381 million in endowment tax in calendar 2023.) Along with raising the rate, the House voted to exempt from the tax both religiously-affiliated schools (think the University of Notre Dame) and those that don't take federal student financial aid. (The religious exemption was structured in a way that Harvard, founded by the Puritans to train ministers, wouldn't qualify.) The House also sought to penalize schools like Columbia University, with heavy international student enrollments, by excluding students who aren't U.S. citizens or lawful permanent residents from the per capita calculations. Then the bill went to the Senate, where the Finance Committee settled on more modest–albeit still stiff–rate hikes. Schools with endowments of $500,000 to $750,000 per capita would still pay at a 1.4% rate, while those with endowments above $750,000 and up to $2 million would pay 4%. Those with endowments worth more than $2 million per student would pay an 8% tax on their earnings, not the 21% passed by the House. Enter Senate Parliamentarian Elizabeth MacDonough, who makes decisions on the Senate's Byrd rule, which requires parts of a budget reconciliation bill like this one to have a primary purpose related to the budget—not other types of policy. The Byrd rule was put in place because reconciliation isn't subject to filibuster. 'You can't get into a lot of prescriptive activity' in a budget reconciliation bill, explains Dean Zerbe, a national managing director for Alliantgroup, who worked on college endowment issues back when he was tax counsel for Sen. Chuck Grassley (R-Iowa). 'Like, 'you've got to hop on one foot,' or 'you've got to make tuition affordable,' or 'you've got to do better in terms of admission.'' The Parliamentarian ruled that those three House provisions—exempting religious-affiliated schools, exempting schools that don't take federal aid, and excluding foreign students from the per capita calculation—didn't pass the Byrd test. At that point, Republican senators settled on the 3,000-student threshold in large part to specifically exempt one school from the tax: Hillsdale College, an ultra-conservative, Christian liberal arts college in Hillsdale, Michigan and a GOP darling. It enrolled 1,794 students in 2023, had an endowment worth $584,000 per-student, and notably accepts no federal money, including student aid. (So both the religious exemption and the one for schools taking no federal student aid would have presumably shielded Hillsdale from the endowment tax—before the Parliamentarian gave them the thumbs down.) There was also a broader group of small schools pushing for the exemption, notes Jonathan Fansmith, senior vice president for government relations and national engagement at the American Council on Education. 'They made an argument that I think got some positive reception among Republican senators of saying that essentially, while their endowments may be big relative to the fact that they have small student bodies … their endowments weren't big.' A school like Amherst, he adds, 'might have a big endowment for a small school, but they don't have a big endowment relative to the Ivies and the more heavily resourced [universities].' House Republicans, under intense pressure to meet Trump's July 4th deadline, ended up accepting the final Senate product in full. That meant exempting the smaller schools, including the 'woke' ones, while levying a rate of up to 8% on the endowments of bigger schools. Congress' Joint Committee on Taxation estimates colleges will now pay an extra $761 million in tax over 10 years, compared to the extra $6.7 billion they would have paid under the House version with its higher 21% rate and broader reach. Based on data from 2023, Forbes estimates that at least 11 universities will have their endowment earnings taxed at an 8% or 4% rate in 2026, while five will continue to pay the 1.4% rate. Three schools—Princeton University, Yale University, and the Massachusetts Institute of Technology—will likely be required to pay an 8% excise tax on their endowment earnings. Another eight, including Harvard, Stanford University, Dartmouth College and Vanderbilt University, will likely pay a 4% tax. 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Business Insider
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I moved from the US to Argentina for the lower cost of living. It helped me pay down student debt, but living abroad had its dark side.
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As Argentina's economic situation and my mental health floundered, I decided to move to Albania. I'm hopeful it's the solution I've been searching for. Living in Argentina helped me pay down my loans When I searched for a new home outside America, I knew I needed a country that allowed longer-term stays, was affordable, and would let me bring a pitbull. In March 2022, I moved to Buenos Aires, Argentina, which met all my criteria. As a freelance writer with US clients, I didn't need any work approval, and I could keep extending my stay as a tourist by crossing the border every three months. I did fumble a bit with the local Spanish dialect — it took me far too long to discover "ll" sounds like "sha," so tortilla was pronounced tor-ti-sha. But I got by. At the time, one US dollar traded for around 110 Argentine pesos. However, the unofficial exchange rate, which was used widely by locals although it's considered illegal, increased the dollar value to 200 pesos. 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In April 2025, I moved into a furnished two-bedroom apartment in Tirana, Albania's capital city, for roughly $600. With utilities, the first month cost $650. Albania still remains somewhat of a new expat destination. It doesn't have the brand appeal of Spain or Italy, but locals I've asked have noticed a big increase in outsiders in recent years. Albania's economy seems stable, which should provide me with predictable monthly expenses. I'd say most things are cheaper here than in Argentina. A cup of coffee costs me just $0.59 per cup. It will take some time to figure out how much spare cash I'll have to pay off debt at the end of the month, since there are resettling costs involved in a move, like buying new dishes and a vacuum cleaner for the ever-shedding dog. I'll be happy if my expenses start to look remotely close to what my early Argentina days were like. I've learned you can't be prepared for everything when you move abroad When I moved to Argentina, I thought I was prepared. I'd researched the country and its occasionally volatile economy, which was financially beneficial to non-peso earners. But moving abroad involves handing over power. Hopping on a plane and settling somewhere new is invigorating, but also terrifying. You can't account for the unknowns. I chose Argentina for financial gain, but had no idea I'd struggle making friends, or that the extended isolation would lead to depression. I still wouldn't change anything about this difficult patch — it's part of my journey. The digital nomad experience is fluid, and your experiences aren't always positive. This fluidity has washed me into Albania. The country's friendly nature makes me hopeful my life will improve not only financially but mentally as well.
Yahoo
a day ago
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