Can I buy that house?

A favorite summer pastime is walking around Philadelphia just admiring cool houses (with a mask of course). Over 200 properties in and around Center City are listed at over $1 million, as shown in the Zillow map below. It led me to wonder (a) where is all this money coming from and (b) how affordable are homes for people (on average). A couple charts in response to (b), in which I aim to provide a sense of the scale of housing wealth and the mortgage market, are also below.

Chart 1 shows the value of owner-occupied real estate (housing wealth) and mortgages outstanding, each divided by disposable personal income. At the end of 2019 these amounts were roughly $29 billion, $11 billion, and $16.5 billion. Value of mortgages outstanding / DPI of 65% is significantly below the pre-financial crisis peak of 100%. We'd need about 1.8 years of disposable income, which includes all sources of income such as wages, investments, transfer payments, employer contributions to pension funds (not sure why that's included in disposable income), less taxes, to buy all the houses.

Chart 2 shows housing wealth divided by disposable personal income and by wage and salary income. It also charts wages and salaries as a proportion of DPI, which have decreased from over 70 percent in the 1960s to 56 percent today-- related to the labor share of output graphs which Robert Reich and others have shown. [In the data the decrease is driven by faster increases in transfer receipts and investment income]. Americans would need to work for over three years (without spending money on anything else), to earn the wages to buy all the houses.

Note: personal income data from BEA release Table 2.6: https://fred.stlouisfed.org/release/tables?rid=54&eid=155443. Housing and mortgage value data from Federal Reserve's Z.1 Financial Accounts.