Trump is a con job of the billionaires, by the billionaires, and for the billionaires

 'Affordability is a con job by the Democrats,' Trump says

You need to earn $158,000/year [2.6x = 410,800] for the median home in the United States to be affordable.

93% don't.

 

 

Owner-occupied housing is in short supply, in part because of pandemic-related panic-buying by 5.4 million in 2020, not because of a post-pandemic illegal alien surge under Joe Biden

 ... we flooded the country with 30 million illegal immigrants who were taking houses that ought by right go to American citizens ... Under the Biden administration, the price of a new home literally doubled in four years. ...

-- The ever-ridiculous J. D. Vance, here

Hysteria is everywhere on this issue.

Owner-occupied housing is hardly higher today than it was at the 2020 peak. 

Buyers became hysterical in 2020, seeking isolation. Vance is hysterical in 2025, playing immigration politics. The Fed went hysterical in 2008 slashing interest rates, and it took fourteen years and pandemic-related inflation just to get them to snap out of it.

The Fed's ZIRP after the Great Recession drove down mortgage interest rates to sub-five percent, averaging less than three by 2021.

As everyone knows, when you lower the long term price of a mortgage, you can "buy more house".

That's the major culprit driving prices higher, making housing more expensive, that and the 2-year rule. It took more than a decade of zero interest rate policy to bring us to this pass. It has not been and will not be remedied overnight, especially by its new cheerleaders in the Trump administration.

Cutting interest rates will only make housing more expensive. 

New housing is indeed soaring, but people need to get a grip. The median sales price of all housing in the United States is up 30% since 2020, not 50% like it was in the five or six years right after 2008.

A better government tax policy on housing is called for. The biggest problem is that the mere 2-year owner-occupancy requirement for capital gains tax exclusion has turned housing into a commodity since 1997. It was a big mistake to make housing so fungible. The answer lies in applying the brakes to that, so that the emphasis is on housing as a home as opposed to as a speculative investment driving prices for all types of homes irrationally higher.

The old policy allowed the exclusion only once in a lifetime. You sold your house when you retired and enjoyed life living off the proceeds mostly tax-free, usually in a down-sized arrangement or as a renter. Otherwise during your working life, when you had to sell to move, you had to purchase at least sideways, or up in price so that your gains went into the new place, not into your pocket. That's how housing became such a tempting source of pent-up capital in the first place. There was an incentive to maintain a ladder of housing values upon which people could move more freely, mostly up but also down.

We need to go back to some form of that arrangement.

But our leaders seem to have no imagination for it. They can't see that what we did in 1997 was a revolution. A bad revolution.

Sad! 

 

Well good luck with that JD, at the rate you guys are going it will take you over 30 years to remove 30 million illegals, and that's being optimistic

 

30 Million Illegal Immigrants Raise Housing Prices

Vice President JD Vance, FOX News

 

Stop the deportation theatre. Get serious and pass some laws against the employers.

 

The average house in my zipcode is $481k, and it's 92% white. Not an illegal in sight. 

Tucker Carlson is still blaming the Larry Finkelsteins of the world for making houses too expensive for the kids to buy

 

Tucker Carlson vs. Student: Why Attack People Not Central To What's Happening? "Why Aren't You Protesting Larry Fink?"

Treasury Secretary Scott Bessent once agreed to call two different houses his “principal residence” at the same time just like Lisa Cook ROFLMAO

 

Bessent made mortgage claims similar to ones Trump cited to try to fire Fed’s Cook: Report

Now that we know Fed governor Lisa Cook bought her second home in Atlanta as a vacation home, Trump's Bill Pulte, who falsely accused her of mortgage fraud, has to go

 

Housing affordability is up for a second year in a row in 2024, which is better than a sharp stick in the eye

 Housing affordability hit a record low 17.22% in 2022.

That is to say, median household income bought 17.22% of the median sales price of a house sold in the United States in 2022. 

The 2024 figure is 19.98%, which is just a little lower than in 2013, when it was 20.12%. Affordability also is about where it was in the middle of the Bush 43 administration, the height of the previous housing bubble.

As you can plainly see, houses were much more affordable in the 1990s, and even more affordable before that. It's a picture of declining affordability overall since then.

Housing did get briefly more affordable in 2009 . . . when 5.5 million people lost their jobs and completed foreclosures were on their way to 6+ million.

Median household income in this data is updated but once a year, and for 2024 that was yesterday.  

 

If we make Trump dictator for life maybe he can do for house prices here what he's doing for them in Poland

 

Bill Pulte, the too big for his britches nutball who doesn't stay in his lane

Every nutball era needs its nuts.

 

Mark Pulte, the father of Lisa Cook accuser Bill Pulte, loses homestead exemption on Michigan property after Reuters investigation finds he committed same infraction of which his son accused the Fed governor lol

Bill is obviously not the sharpest knife in the drawer. 

 Bill Pulte accused Fed Governor Lisa Cook of fraud. His relatives filed housing claims similar to hers: Reuters

... Mark and Julie Pulte, the father and stepmother of Bill Pulte, President Donald Trump’s appointee as director of the Federal Housing Finance Agency, since 2020 have claimed so-called “homestead exemptions” for residences in wealthy neighborhoods in both Michigan and Florida, according to the records. The exemption is meant to give a discount to homeowners on taxes for properties they use as their primary residence. 

Local tax officials in both states told Reuters that claiming more than one home as a primary residence isn’t generally allowed in their jurisdictions and could be punishable by fines or back taxes. After Reuters contacted tax officials in Bloomfield Township, Michigan, to inquire about the dual claims, Darrin Kraatz, director of assessing, on Thursday said the township “as of today” would revoke the exemption on the Pultes’ residence there. ... 

It isn’t clear how much the Pultes may have saved each year because of the Michigan claim, but on Friday property records already indicated the exemption there is now zero.

 

Bye dad!

 

 

Irwin Stelzer: Trump has substituted state capitalism for market capitalism

 

 Trump sees off the free-market capitalism that enriched America

... In short, the extent of presidential control of the economy has not been seen since the end of the Second World War. Trump has added to his influence over macroeconomic policy by levying tariffs, another name for taxes. He is in the process of gaining control of monetary policy by packing the Fed board and firing an existing board member for alleged mortgage fraud, no trial necessary.

Fed independence, done and dusted, control of the macroeconomy complete, he is turning his attention to the independent players that make up the microeconomic economy. With sycophants in seats once occupied by powerful advisers and the opposition Democrats in disarray, effective resistance to Trump’s power push is negligible. ...

Now, as president, he is favouring visitors with baseball caps emblazoned “Trump in 2028”.

Donald Trump is such an asshole

No "innocent until proven guilty" for this guy.

It's a blatant power grab which will give him two appointees to Fed governor on top of one to Fed chair when Powell finishes his term in the spring. If he finishes his term in the spring. 

What a tragedy for this country and its prestige as issuer of the world's reserve currency.

 

Trump says he’s removing Fed Governor Lisa Cook, cites mortgage fraud allegations

 

 

 

The cost of groceries is a major source of stress for 53% of US adults according to AP-NORC poll, followed by the cost of housing

... Esther Bland, 78, who lives in Buckley, Washington, said groceries are a “minor” source of stress — but only because her local food banks fill the gap. Bland relies on her Social Security and disability payments each month to cover her rent and other expenses — such as veterinary care for her dogs — in retirement, after decades working in an office processing product orders.

 

“I have no savings,” she said. “I’m not sure what’s going on politically when it comes to the food banks, but if I lost that, groceries would absolutely be a major source of stress.”

Bland’s monthly income mainly goes toward her electric, water and cable bills, she said, as well as care of her dogs and other household needs.

 

 “Soap, paper towels, toilet paper. I buy gas at Costco, but we haven’t seen $3 a gallon here in a long time,” she said. “I stay home a lot. I only put about 50 miles on my car a week.” ...

 

Bland, the Washington state retiree, said she’s paid for pet surgery with a pay-later plan. ...

 

More. 

 

 

Housing in a Fed stress test scenario

The median price of houses sold in the United States in March 1963 was $17,800.

Adjusted for inflation to March 2025, that would be $186,600.

But in fact the median price of houses sold was $416,900, 123% higher.

A 36% shock to that as contemplated by the Fed's recent bank stress tests could bring the median price of houses sold down to $266,800, dialing the clock back to 2013, which is still 43% higher than what the long term price would be merely adjusted for inflation.

A large number of homeowners who have purchased homes from 2020 when prices skyrocketed by 31% could be instantly underwater in this scenario. There have been 4.73 million new large bank consumer mortgage originations since 2Q2020.

Add losing a job and boom, you could have another foreclosure crisis all over again.

The 2007 shock to the median price of houses sold was only 19% 1Q2007-1Q2009, with prices not recovering until 1Q2013, but many millions of foreclosures were completed over the period.

A mitigating factor for homeowners generally today is owners' equity in real estate, which was almost 62% in 2005, but in 2025 is almost 72%, ten points higher. We haven't seen a level like that since 1960. 

Owners' equity had crashed by a quarter to 46% by 1Q2012, the lowest on record in the post-war.

Every major bank passes stress test from the US Federal Reserve

507 banks failed in the United States 2008-2014 inclusive, costing the Deposit Insurance Fund nearly $90 billion. Many millions of homes went into completed foreclosure.

 

Big banks all pass the Federal Reserve’s less vigorous stress tests

 

... All 22 banks tested this year would have remained solvent and above the minimum thresholds to continue to operate, the Fed said, despite absorbing roughly $550 billion in theoretical losses. ...

 

Under this year’s hypothetical scenario, a major global recession would have caused a 30% decline in commercial real estate prices and a 33% decline in housing prices. The unemployment rate would rise to 10% and stock prices would fall 50%. In 2024, the hypothetical scenario was a 40% decline in commercial real estate prices, a 55% decline in stock prices and a 36% decline in housing prices. ...      

 

The 2024 benchmarks are a mixture.

 

Commercial real estate prices year over year fell more than 11% in 4Q2008, and more than 30% in 4Q2009. Planning for a future 40% decline seems appropriate.

 

The 2007 shock to the median price of houses sold was only 19% 1Q2007-1Q2009, with prices not recovering until 1Q2013. But since the median price of houses sold has jumped by about 31% just since 2020, planning for a future 36% decline is more than appropriate.

 

Unemployment peaked at 10% in October 2009. The civilian employment level contracted by almost 7 million 2007-2010 on an average basis, and did not recover until 2014, seven long years later. Pandemic unemployment peaked at 14.8% in April 2020. We got as high as 10.8% in November and December 1982. Great Depression unemployment peaked at 25.59% in May 1933. This one is a crap-shoot. 

 

The average price of the S&P 500 fell 50.8% between October 2007 and March 2009, but in 2007 the S&P 500 was valued about 26% above the long term mean, not 130% as in 2024.

 

That's the datum that worries me. Just to get to its historical median value of 81, the S&P 500 today would have to fall 61%, to about 2425.

 

Imagine the howls. 

 

 

 

  

 

The US Senate's biggest phony, Republican Senator Ron Johnson of Wisconsin, boasted he had enough votes to stop Trump's bill, but voted for it all three times in the end

 

 

The roll call votes are here, here, and here.

June 4, 2025, here:

Republican Sen. Ron Johnson on Wednesday blasted President Donald Trump’s “one big, beautiful bill” as “immoral” and “grotesque,” and reiterated that he will vote against it unless his GOP colleagues make major changes.

“This is immoral, what us old farts doing to our young people,” Johnson said on CNBC’s “Squawk Box” after sounding alarms that the massive tax-and-spending-cut bill would add trillions of dollars to national deficits.

“This is grotesque, what we’re doing,” Johnson said. “We need to own up to that. This is our moment.”

“I can’t accept the scenario, I can’t accept it, so I won’t vote for it, unless we are serious about fixing it,” he continued.

Johnson has been among the Senate’s loudest GOP critics of the budget bill that narrowly passed the House last month.

Johnson and other fiscal hawks have taken aim over its effect on the nation’s debt. The nonpartisan Congressional Budget Office estimated later Wednesday that the bill would add $2.4 trillion to the national debt over the next decade.

Johnson has proposed splitting the bill into two parts, though Trump insists on passing his agenda in a single package.

“The president and Senate leadership has to understand that we’re serious now,” Johnson said of himself and the handful of other GOP senators whose opposition to the bill could imperil its chances.

“They all say, ‘Oh, we can pressure these guys.’ No, you can’t.”

Republicans hold a narrow 53-47 majority in the Senate, so they can only afford to lose a handful of votes to get the bill passed in a party-line vote.

“Let’s discuss the numbers, and let’s focus on our children and grandchildren, whose futures are being mortgaged, their prospects are being diminished by what we are doing to them,” Johnson said.

Johnson’s comments came one day after Elon Musk ripped into the spending bill, calling it a “disgusting abomination” that will lead to exploding deficits. The White House brushed aside Musk’s comments.

Johnson said Musk’s criticisms bolster the case against the bill.

“He’s in the inside, he showed … President Trump how to do this, you know, contract by contract, line by line,” Johnson said of Musk. “We have to do that.”

Johnson said his campaign against the bill in its current form is not a “long shot,” because he thinks there are “enough” Republican senators who will vote against the bill.

“We want to see [Trump] succeed, but again, my loyalty is to our kids and grandkids,” he said.

“So there’s enough of us who have that attitude that very respectfully we just have say, ’Mr. President, I’m sorry, ‘one, big, beautiful bill’ was not the best idea,” he added.

 

At 65.6% in 2024, the homeownership rate in the United States matches the 1980 rate, which was an historical high water mark not exceeded until 1997

 For all the justified complaining about not being able to afford a home, the homeownership rate in 2024 is historically pretty good, one of just twenty years since 1963 at the level of 65.6% or higher. 66% of the time the homeownership rate has been lower than it was in 2024. 

In 2023 housing affordability in the United States bounced off the 2022 low but is still 9.15 points off the more affordable levels of the 1980s

 The median income in 2022 bought just 17.22% of the median house, the all-time low in the most up-to-date data.

In 2023 that rose to 18.89%.

Peak affordability in the data was in 1984 at 28.04%.

 

 

When core pce inflation was above 2.5% year over year for 27 straight years, we had 10Y yields well above 5 and 30-year mortgages well above 7.5 to go with it

 1967-1993, inclusive.

 

 

I worked for a guy once who everyday wore a blue suit without fail

I remember he officiated at a funeral once, and yep, he wore a blue suit.

Even when I visited him at his home he was wearing a blue suit.

More remarkably, though, on pay day once a month my boss would go to the bank, take out a wad of cash, and then pay his mortgage in cash, walk to the phone company and pay in cash, and walk to the utility company and pay in cash.

He'd also pay me in cash.

Then he'd walk to the hotel bar with his friends for the evening and pay in cash.

He paid for everything in cash, unlike this guy.

Standards have really declined.