Buying the average American home today involves a much larger slice of people’s income—mainly realized under the Biden-Harris administration. Shortly after the Biden-Harris team took office in 2021, housing affordability began to slide, then collapse.
The biggest theme in the real estate market in the last 3.5 years has been high mortgage rates and record-high home prices, which have kept home ownership out of the reach of millions of Americans—stuck in the renting economy.
Tight housing supplies have driven up housing prices across the country. However, failed Bidenomics unleashed an inflation storm, which forced the Federal Reserve into an interest rate hiking cycle that was one of the driving forces behind the affordability collapse.
Even as overall inflation moderates, the latest data from the National Association of Realtors shows affordability conditions have yet to improve, still trending at record lows. The Biden-Harris team spent the last 3.5 years championing Bidenomics.
Kamala Harris 367 days ago: “That is called Bidenomics! Ha ha ha! That is called Bidenomics and we are very proud of Bidenomics!” pic.twitter.com/gOxPZvxTCk
— Steve Guest (@SteveGuest) August 5, 2024
Fast forward to today, Harris admits Bidenomics has failed.
KAMALA: “We believe in a future where we lower the cost of living.”
She has been in office for 3.5 years — over which the average American family has lost an extra $26,000 paying for the increased cost of living. pic.twitter.com/NfQtLIpn4s
— Trump War Room (@TrumpWarRoom) August 10, 2024
Meanwhile, the Biden-Harris team offered no real solutions to cushion Americans in some of the worst housing affordability conditions in a generation.
But last week, Kamala Harris unveiled her housing plan. Given the continued affordability crisis, this is just a few years too late for Democrats.
Anyway, the think tank Hoover Institution pointed out that Harris’ housing plan “does not address the most important reason why housing is expensive: high construction costs. Instead, the plan significantly subsidizes housing demand, which will put upward pressure on housing costs.”
“One of the biggest demand subsidizers in the proposal is to provide $25,000 to first-time home buyers,” the think tank said, adding, “Based on the information Harris provided, I expect about 20 million US renters would be eligible and apply for this program if Harris wins the presidency.”
As Hoover pointed out in the note titled “The Unpleasant Arithmetic of Kamala Harris’s Housing Plan,” Harris’ plan concentrates on subsidizing demand, not improving supply. Thus, government subsidies would only supercharge demand and worsen the unaffordability crisis by sending prices higher.
This leaves us with Nick Gerli, CEO of research firm Reventure, who showed on X what prospective buyers need regarding salaries for the most basic homes on a state-by-state level today.
Not surprisingly, Californians must earn more than $200,000 annually to afford the average home.
Housing affordability in California has become so bad that the typical buyer now needs to earn over $200,000/year just to afford a basic house.
That’s by far the worst affordability in America.
Interestingly, prior to the pandemic, you only needed to make $93k in order to buy… pic.twitter.com/R7eBh8kxBx
— Nick Gerli (@nickgerli1) August 20, 2024
The affordability gap for Californians is shocking and happening under left-wing Gov. Gavin Newsom.
2) What’s alarming is how much worse this affordability has become in recent years.
Back in 2019, a California buyer needed to make $93k to afford a house.
Now it’s over $200k.
And the median income (grey line) hasn’t come close to keeping up. pic.twitter.com/ssw1qzA8N2
— Nick Gerli (@nickgerli1) August 20, 2024
“But don’t sleep on a state like Massachusetts. It’s lack of affordability is right up there with California,” Gerli said.
3) But don’t sleep on a state like Massachusetts.
It’s lack of affordability is right up there with California.
Homebuyers in Massachusetts now need to make $173k in order to buy a house.
Compared to a Median Income of $99k.
Meaning the cost to buy is almost 2x the median… pic.twitter.com/7NVsH5jfRq
— Nick Gerli (@nickgerli1) August 20, 2024
Gerli provided an informative graphic on a state-by-state basis of the incomes needed to afford basic homes.
The focus here should be on the collapse of housing affordability under Biden-Harris’ watch. The administration offered zero policies to address the crisis effectively. Yet Democrats under Harris want to address the crisis by subsidizing housing demand, which would only worsen the situation by sending prices higher. This is clown world.
Tyler Durden
Thu, 08/22/2024 – 18:50
