Unaffordable Housing?… Gouging the Working Class Americans

October 10th, 2015

Awake Goy

A recent report by Harvard University’s Joint Center for Housing
Studies showed an absolutely dismal housing situation for Americans.
Housing is unaffordable for most working class Americans.

Sure you can take on a gigantic mortgage with a low interest rate and
pretend all is fine but you are simply chaining yourself to the bank for
30 years if you don’t run your numbers correctly.

In large part the
home ownership rate has fallen because home prices are out of reach to
Americans. Many are relegated to renting.

The study from Harvard found
that renters are being financially squeezed at unprecedented levels. How is this measured?

The study looked at how much household income
was being used to pay for monthly rents.

As it turns out, Americans
are paying an ungodly amount of money in rents per month and much of
this is flowing to new corporate landlords thanks to banking friendly
bailouts.

The rent is too damn high!

The home ownership rate dropping means people are living somewhere
else. Sure some Millennials are moving back home with their parents but
others are opting to rent.

Let us be clear here: you never fully own a
house contrary to all the housing propaganda
out there. Even if you pay off your mortgage to the bank, you still
have nonstop taxes, maintenance, and insurance.

Buying a home makes
sense in many cases but this blind adherence to purchasing a home is
what led many into the fires of foreclosure.

While the public was left
to fester at the torture chambers of austerity, banks got off easily and
suddenly found their niche in becoming large landlords. Now the rents
are soaring. A shocking revelation, I’m sure.

Take a look at this chart:

11.2 million households that rent (26.5 percent of the total) are
severely burdened by the amount of rent they are paying. What this
means is that rents are consuming half of their monthly household
income.

Housing is the biggest expense for Americans so this is an
important line item to follow.

This is problematic because inflation is occurring in real things. There is this constant narrative that inflation doesn’t exist so
therefore central banks can continue on this wild uncharted experiment
in monetary policy.

So far, it looks like banks are doing just fine but
the public isn’t. Rents are going up but incomes are not.

And the problem is likely to continue:

It looks like over the next decade those severely burdened by rents
will rise by 11 percent reaching 13.1 million households. This problem
will continue for a variety of reasons including:

-1. Banking policy has incentivized financial
institutions and big investors to chase after yields. This led into a
rush to buy single family homes as rentals, an option largely
unattractive to big money in the past.

-2. Stagnant incomes. Household incomes have been stagnant for
nearly a generation now. Rents are outpacing any gains in income:

-3. Builders are not building housing at fast enough rates, especially affordable housing.
Builders realize the market is being juiced by the Fed and American
households are cash strapped. Why would you build new homes which tend
to be more expensive?

-4. Fed’s low interest rate policy. The Fed can say what they want
but the entire global central bank mantra is about chasing rates lower.
There is too much debt to entertain higher rates regardless of what is
said.

Fewer homeowners, higher rents, and more disposable income flowing to
banks. And you wonder why Americans are angry. The subsidies to banks
are too damn high.

Source

October 8, 2015 – KnowTheLies.com