You can’t afford to buy a house. Biden knows that.
You can’t afford to buy a house. Biden knows that.
The housing crisis is already shaping the president’s reelection campaign.
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You'd have to go back to around 2000 to find rates on a 30 year fixed comparable to today's. https://www.freddiemac.com/pmms
Historically we're still in a period of pretty good rates. However, the reality is who cares about what things were like more than 25 years ago. The new normal is 6ish percent, and we're over that right now. I don't think we're ever going to see rates below 5% again, not counting for some extraneous circumstance nobody can predict. But at this point any relief is going to be meaningful to a lot of people.
On the other hand, home prices are not coming down, and they probably will not come down even if there's plenty of overinflated valuations out there.
Therefore the only thing to give on affordability is increased supply to keep home values from continuing to grow in a pace that outruns incomes, and lower rates so more people can afford what's out there today.
You can't really use interest rates to compare our current situation with recent history.
A feeding frenzy at insanely low interest rates for an extended time caused prices to skyrocket. So even though interest rates are at a historically normal rate, the housing prices have insanely outpaced inflation to a ridiculous degree (in high cost areas like California, which is my situation).
I would be very interested in seeing the change in the distribution of:
- Corp owned properties (hedge funds, etc included)
- Multiple investment property owners
- Short term rentals
It doesnt seems like our population had some sudden boom and new housing couldn't keep up. Instead, it seems like greedy people have bought up every property they could, and continued to parlay the rental income into additional property purchases. And hedge funds have been buying everything up, even using AI to automate it.
If the above stands up to scrutiny, then legislation should be passed to encourage owner occupation.
- Tax the shit out of any properties beyond 2 or 3. This allows small time landlords, which is healthy for the rental market.
- Out right ban, via heavy taxation for X years until a full ban, businesses / hedge funds from owning single family homes / individually sold condos. The only place we need corporate money in is high density living like apartments. But these should be carefully limited in favor of individually owned condos.
Of course, there should be some grace period to allow owners to sell off their existing properties. But to be blunt, it needs to be relatively short, like 3 years, to actually affect housing prices in a good way.
Being able to own where you live should be a fundamental right to the working class. Instead, housing is treated as a commodity, and the greedy have caused runaway inflation, and the working class are suffering. Morally, I'm perfectly fine with them taking a loss.
For you individuals who bought in the last few years to occupy, you have your own home to call your own, and can afford the payments even if the value goes down. You are not entitled to your "investment" always increasing in value. Society is suffering because of the current paradigm. It needs aggressive correction.
Outright ban of hedge fund ownership of residential properties via life imprisonment for all executives of that hedge fund. Raising taxes just means the renters will pick up the tab.
I don't think we disagree here.
Rates are higher than the current market can bear, a result of the artificially extended period of historically low rates. The pandemic can only be blamed for some of this. The prior administration juicing the economy against sound economical principals telling us rates should have continued the rise that started around 2016/2017 contributed at least as much and hamstrung our tools to respond.
Housing stock shortages have long list of causes, as you line out. With so many things contributing to the problem it's hard to cope with, both at a policy level and for us regular folk. An average person needs an explanation that's easy and memorable, and thereby actionable in terms of throwing their support behind. That's not easy when there's not enough fingers to point, solutions to each aren't clear, and there's only so much political bandwidth that can be put towards making change.
It's going to be slow, and not everything will work, but I'm glad there is finally attention on it and it looks like the people who can do things are doing them instead of just talking.