I learned an interesting fact today*.  I learned that 50 years ago families used to put 40% down on their houses and payments used to average 9x comparable annual rent.  Mortgages used to be like car loans, with average lengths between 5 and 15 years. The homes were much smaller in the 50’s (see graph or go to the oldest neighborhoods in your town to see what I mean)

Today the most conservative families only put down 20% to avoid PMI (such as myself) and the rest do 3% or 5% or before the sub-prime meltdown they would even put in negative amounts borrowing 105-120% of the sale price.

What this tells me is that home valuation increases will be lower in the next fifty years than they have been in the past fifty.  This is because people can’t extend mortgages beyond 30 years and we may even see a trend towards shorter mortgages, smaller houses, and overall lower quality of life as measured by what sizes houses we as a population own.

This information dovetails nicely with the Plight of the PIC in several areas.  This trend towards growing the size of homes is being reversed but even still the expectation for ‘reasonable’ is actually a cultural golden handcuff, or a major component of a PIC’s life that leads to the handcuff.

There are several escape routes to being a PIC, a subject we haven’t touched on yet in our ongoing narrative on Professional Individual Contributors.   Maybe reconsidering the home you have is one of them.

*This post was originally written in 2012  for another blog and revised in 2015 for this one.  

Posted by Mike Peluso

Mike Peluso writes about the collision between between the business / professional world and life. He also writes about the journey involved with the Peluso Presents efforts including the Blog, Books, and Podcast so that others may benefit from his efforts. From Mike: I spend hundreds of hours working on these articles every year with no compensation other than support I get through donations. You can support with a tip and by Subscribing to the Podcast (and writing a review on iTunes would be really appreciated as well!) One time tips: www.paypal.me/pelusopresents https://venmo.com/pelusopresents


  1. […] one of my earliest articles, I discussed the idea that  we need to rethink our housing.  Housing has gotten larger and larger […]



  2. […] sport four door crew cabs.    And then a light bulb went off. It’s the same effect I talked about years ago on my blog when I discussed the size of houses getting bigger.  The TL;DR version of that article is that […]



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