Posted on 07/12/2022 7:02:52 AM PDT by Browns Ultra Fan
We are across the great divide! In terms of house prices and affordability.
We are all aware that inflation is soaring, since the Covid outbreak in 2020 and the massive overaction by The Federal Reserve and Federal government in terms of stimulus spending and economic lockdowns.
Things were “normal” before Covid in that REAL housing rent (white line) and REAL average hourly earnings YoY (yellow line) moved together. But after Covid shutdowns and Federal stimulus “relief” (orange line), we see that inflation (blue line) took off along with the growth in housing rent.
The question, of course, is whether The Federal Reserve will continue their “war on inflation” with a 75 basis point rate increase.
Inflation is at its fastest pace in 40 years, and is expected to increase even higher in tomorrow’s inflation report.
Gasoline prices have been dropping recently, but remain above $4.50 per gallon (regular gas price was $2.40 per gallon on Biden’s inauguration day. And no, it wasn’t the Biden Administration selling nearly 1 million barrels of crude oil from the strategic petroleum reserve to the Chinese government-owned Sinopec that Biden’s son Hunter is an investor (so, The Big Guy aka Joe Biden gets a 10% piece of the action).
Between soaring gasoline prices and soaring home rents, it is little wonder that there is a serious homeless problem in places like New York and California.
With rising mortgage rates, we are seeing a surge in pending home sales cancellations.
Atlanta Fed’s Raphael Bostic thinks that the US economy is so strong that it can easily handle a 75 basis point increase at the next FOMC meeting. Fortunately, he is not a voting member.
I wonder if Joe Biden sings “Carry On My Wayward Son” to Hunter?
(Excerpt) Read more at confoundedinterest.net ...
Joek did that.
This is a disconnect, between rents/housing prices, and the incomes of the people who pay the rent or mortgage.
Isn’t this unsustainable?
I don’t know all the details and nuances of all of this. But I do wonder, what happens when the middle class and next generation is completely priced out of home ownership? And what happens when even those who are doing well financially, are spending a lot more of their income just to have a decent place to live.
And then I wonder what role, if any, government policies are playing in causing the problems. For example, housing costs are said to be escalating because of so many investors buying houses. What role do tax laws or other governmental policies play in that happening?
Jimmy Carter can die with a smile on his face now.
Can someone explain why oil is dropping in price while there’s shortages
The government is massively upsetting the natural balance in the economy. By tampering with it (stimulus, overspending, putting a lid on energy) they are causing new problems.
INFLATION, by it’s very nature, is government caused - whether it’s printing more money or any other means.
The only good perspective here is that Jimmy Carter begot Reagan.
Just as Bidung will beget the Ultra MAGA King’s second reign.
GO TRUMP!
But at least no more mean tweets.
“Real rents rising”: There’s a housing shortage.
“Rise in home sales”: There’s a housing shortage.
Everything else is BS.
There’s a housing shortage, period.
I don't believe this at all. I think there are other demographic and socio-economic factors at work here. Consider these three facts:
1. The U.S. population increased by about 17% from 2000 to 2020.
2. The number of households in the U.S. increased by about 24% over the same period.
3. Birthrates in the U.S. are miniscule right now. There are more people over the age of 80 in the U.S. than under the age of 2.
Here's what's happening, folks ... We have people living in smaller and smaller households, and staying in their own homes long after they are still working. This has been exacerbated in regions where large numbers of age-restricted 55+ communities have been built with major tax incentives.
The housing "shortage" will correct itself once extended families start living like normal families again.
The housing shortage has been building for 10 years. Many young people make very good money these days and there are a lot of them. As dual income professionals they can buy. Housing demand is high, and addition to the housing supply is years behind.
I’m in a town with an average house sale price around $270k. This is a farming area. The house next door just sold for $587k. The buyers are in their early 30’s. They are in Europe for 3 weeks right now, and when they get back they are going rafting in the Grand Canyon for 2 weeks.
What do they do for a living? Flip houses and sell CBDs among other things. They are entrepreneurs. They sit outside on their porch with computers and phones and work from home, when they are around.
There’s a housing shortage and it isn’t new, it’s been building for 10 years.
By the way, I’m a retired land developer. I’m in a Master Mind Group, are you familiar with those? My MM group consists of bankers, developers and builders. They are all telling the same story, high demand, qualified and able buyers, many of them buying using cash and waiting 2 years to get a house built. Why? Because young people would rather sit at home pushing buttons and making money than swinging a hammer. Labor and material shortages and Covid just made the already existing shortage much worse.
“Birthrates in the U.S. are miniscule right now. There are more people over the age of 80 in the U.S. than under the age of 2.”
You are one of the few people on this forum, that actually understands the demographic situation in this country and globally.(The whole globe is getting old BTW)
Nice work.
It's not unlike what I did last year. In the aftermath of the COVID fiasco -- when my business was deemed "not essential" and was supposed to be shut down in my state -- I decided to relocate to another state and take my business with me. I work in a STEM field with clients across a multi-state region, and the work-from-home measures that were instituted in early 2020 simply made my physical location almost meaningless (as long as I can reach any project site within a 5-6 hour drive).
People around here are saying there's a housing "shortage," but that's not obvious to me. I think the inflationary trend of the last two years has interrupted a lot of new construction, but the biggest factor in this "shortage" is that the normal cycle of relocations and retirements has been completely disrupted ... so anyone who was planning to move in the period from 2022 through 2026 has already sold their homes in a hot market and left.
The house next door just sold for $587k. The buyers are in their early 30’s. They are in Europe for 3 weeks right now, and when they get back they are going rafting in the Grand Canyon for 2 weeks.
Let me guess ... they have no kids, right?
We have three rentals. One, the rent is tied to the mortgage and it’s gone up $700/mo because of insurance and tax costs. The other two are paid for but we don’t want to raise the rent on the one because we love our tenant and we don’t want any turn overs. The other tenant is a disabled vet and the govment raises it with COLA. Already pretty high. Our farms are paid for. We’re a couple of old hippies and doing okay in our retirement. Our 401[k]s have taken a hit but oh well, we only used them for travel and to give to our kids. Not doing either right now. I pray daily for the people who have so little and are struggling. And I prepare for worse before we die. One day at a time.
that could be fixed by deporting all the illegals and their anchor babies.
“that could be fixed by deporting all the illegals and their anchor babies.”
That is a nice narrative that fits this forum perfectly. However, I doubt it has much validity.
Hispanics are the biggest immigrant group in my county. Their numbers peaked 10 years ago and have been retreating ever since.
I’ll give you an anecdotal example.
I lease office space to a landscaping company.
They’ve lost two employees this year to migration back to Mexico.
Those employees went home to tend to their real estate holdings.
if they think they can take our guns deporting all the illegals will be easier than that.
Are you suggesting we let them stay?
2 self deported.. maybe we can get more to to save us the troubles.
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