Median household income now buys about 17% of the median sales price of a house, a new low: Joe Biden is the Barack Obama of unaffordable housing, only worse

 Housing affordability has never been so bad.

The median sales price in 1Q2022 climbed to $428,700.

Median household income in January 2022 is estimated at $74,099, which buys 17.3% of the median house sold in the United States.

Official annual figures through 2020 are indicated in this chart.

 

 

LOL, according to this stupid definition by a university pinhead, there are only 23.8 million middle class workers

“If you are holding a position that is non-managerial, non-executive level, doesn’t have a lot of decision power, you would have been classified in our study as working class,” Addo says [here].

In February 2022 there were 128.2 million total private employees. 104.4 million of them were "production and nonsupervisory".

 

That's a ratio of workers to supervisors of about 4.4:1 in the private sector. In the federal government, the ratio's much worse, somewhere between 7-10:1. That's probably closer to the truth also for the entire government sector,  which is 22.2  million strong.

 

The supervisors are the elite minority, hello. 

The best proxy for middle class has always been homeownership: house, condo, whatever. It's one of the most basic things which has defined us and more importantly united us for generations. There was a time when everyone said, rich and poor alike, that they were middle class, it was that strong of an American ideal. 

Now we're stuck with a bunch of eggheads trying to divide us by overthrowing definitions.

Total households in 2020 numbered about 128.5 million in the United States. Roughly 84 million were owner occupied at the time, 42 million renter occupied, a ratio of 2:1.

 

The average size of a household in 2020 was about 2.53: (84 + 42) 2.53 = 319 million (a relatively small additional number of Americans lives in subsidized housing, military housing, and institutionalized housing).

A broad swath of Americans, 66%, lives in an owned home, with about a third distributed at the top and the bottom renting out of either convenience or necessity.

 

And most of them are by definition nonsupervisory employees.

Housing affordability turned down again in 2020 as housing prices climbed ever higher and incomes fell

The key to joining the middle class has always been the full-time job, without which you cannot afford a house.

The rich have taken away the keys.

Huge COVID-19 outbreak among fully vaccinated Texas prison inmates mirrors huge Provincetown, MA, outbreak among fully vaccinated gay revelers July 4: The vaccinated are spreading the disease

 Story BURIED by AP Obama here (Drudge also buried the story last night, shown below):

NEW YORK — A new study of Texas prison inmates provides more evidence that coronavirus can spread even in groups where most people are vaccinated.

A COVID-19 outbreak at a federal prison in July and August infected 172 male inmates in two prison housing units, according to a Centers for Disease Control and Prevention report released Tuesday.

About 80% of the inmates in the units had been vaccinated. More than 90% of the unvaccinated inmates wound up being infected, as did 70% of the fully vaccinated prisoners.

Severe illness, however, was more common among the unvaccinated. The hospitalization rate was almost 10 times higher for them compared with those who got the shots.

It echoes research into a July outbreak in Provincetown, Massachusetts, where several hundred people were infected -- about three-quarters of whom were fully vaccinated.

Such reports have prompted a renewed push by health officials for even vaccinated people to wear masks and take other precautions. They believe the delta variant, a version of coronavirus that spreads more easily, and possibly waning immunity may be playing a role.

The authors did not identify the prison, but media reports in July detailed a similar-sized outbreak at the federal prison in Texarkana.

Just look at that html:

https://apnews.com/article/business-health-education-florida-pandemics-9aa03a247c10215079cafff898b60ab7

 

 

Jason Lewis on the Rush Limbaugh Show this week was lighting his hair on fire about inflation

Jason Lewis' remedy for inflation, which came in at 5% year over year in May, actually 4.9%, is the standard remedy: The Fed should raise the interest rate, which is effectively zero at the moment and has been for some time.

Aggressive low-interest-rate policy has been the rule since 2002, with the brief escalation from 2005-2007 during the housing bubble being the exception. Over those 19 years through 2020, the average effective federal funds rate (DFF) has been 1.36%.

Contrast that with the 19 year period previous to that, from 1983-2001, when the DFF averaged 6.27%.

That should have kept inflation under control, right?

Well, no.

Under the low interest rate regime we've had an average annual change in CPI of just 2.01%. For the previous period with the higher DFF we had higher inflation, 3.24% per annum on average.

All inflation is bad. At 2% per annum the value of your pile of assets is cut in half in 35 years. At 3% it's closer to 20 years.

What kind of conservatism is it to advocate for either one?

Real conservatives believe in sound money. Less unsound money won't do.

The evidence is the two things, the fed funds rate and CPI, aren't correlated.

And CPI is rightly mocked because its components do not capture the inflation which has infected the cost of education, health care, housing, stocks, gold, intellectual property, et cetera in our life times.

It's the purchasing power of the dollar which has continued its inexorable decline which is the problem. We haven't had a sound dollar policy since the advent of the Great War in 1914. The desire for an independent monetary policy conducted by a Federal Reserve from 1913 came at the price of the ongoing robbery of the wealth of the people. World War couldn't have been financed without it, nor the Welfare State after it.

It's hardly a coincidence that political conservatism has been in retreat from the same time. You make a lie of the money in your pocket, you make a lie of everything else, too. Slowly at first, and then suddenly.

This American swindle will not continue forever.

 

The rental vacancy rate in the US turned sharply upward beginning in July 2020 and continues higher in 1Q2021

 

The home vacancy rate in the US in 2020 hit a new all-time low of 1%

 

The ratio of owner-occupied to renter-occupied housing soared in 2020 as pandemic hysteria gripped the US and people sought refuge

 

The on-going housing bubble

I checked the value of my home on Zillow today.

It's nuts.

After 13 years the estimated price is up 6.5% per annum.

On the other hand, the house I previously owned and sold is up only 0.8% per annum over the same period.

Two entirely different houses, two entirely different locations, two completely different histories. What seems like a bubble living in my current house wouldn't seem like one living in my old one.

The best way I've found to think about this is to ask, How much of a house will my income buy? For bubble purposes nationally, even though housing is a regional and local matter, use median household income and median sales price.

Here's the chart of that data as currently available.

In 2020 the Median Sales Price of Houses Sold for the United States (MSPUS) averaged a new high of almost $337k. We don't yet have the median household income figure for 2020, but it's likely to be bad news, skewing the graph lower again as less income buys a smaller share of increasingly expensive housing.

As you can plainly see, the trend for the percentage of a house purchased by an income has been all downhill since the end of Reagan Bull in 2000. The percentage really fell a lot during the housing bubble which peaked in 2005-06, helping precipitate GFC1. Incomes fell a lot after the Great Financial Crisis because people lost their jobs by the millions and never got them back and so less income purchased less house. Housing prices bottomed in 2012 and then rebounded slowly. Incomes did not, however, and what you made just kept buying less in the low range of 19%. 

That all sucked. Obama really sucked. Sucked historically bad. Record-setting bad. 

You'll notice things really improved in 2019, however. That's because median household income shot up $5k to over $68k (Trump tax cuts), and the median sales price of a house actually fell $5k to $320k. Your higher income bought more of a slightly cheaper house, not as much as the good old days, but more.

Unfortunately in 2020 median sales price shot up almost $17k while millions upon millions lost their jobs. The feds enacted foreclosure forbearance so that 2.3 million homes whose owners lost their jobs never came onto the market. But desperate people who wanted out of cities snarfed up inventory. Demand far exceeded supply, so prices went up. 

But even at 21.5% in 2019 housing was nowhere near affordable like it was from 1987-2001. It was a nice, hopeful moment, while it lasted.

I'm guessing it's going to be quite a while, though, before we ever see even that again. 

Growth in the number of owner occupied housing units seemed to slow in 2019, but the pandemic crisis has boosted it by 6 million!

 

An astonishing increase.

Green New Deal in the hands of Democrats is a dagger aimed at the heart of the middle class

 Joel Kotkin here in The New York Post:

If these Democrats win both houses of Congress as well as the White House, things could get far worse for the already beleaguered middle class, which has been rocked by the pandemic, with an estimated 100,000 small firms going out of business. Particularly hard-hit by the recent urban unrest are inner city and minority businesses. ...

If the Democrats win on Election Day, the future for the middle class could be bleak. As a lifelong Democrat, this is not easy to write, but most of the party’s initiatives — such as the Green New Deal — are directly harmful to those in the middle and working classes, who’d be forced to face increased housing and energy prices and fewer upwardly mobile jobs in industries like manufacturing.

Stock market performance under Trump has been good in comparison with his predecessors, but best ever remains Eisenhower by far, followed by Truman

The post-war boom was almost inevitable and had little to do with the individual man and his policies. The income tax code's punitive elements at the time drove money into domestic investment, which received favorable tax treatment.

For America to be great like that again we must punish foreign investment and reward domestic. That's what creates jobs for Americans and expands markets for housing, autos and everything else here at home, with the result that companies make money and stocks do well.

But everyone in both parties, it seems, still want everything for themselves, investing abroad where labor is cheaper and regulation lax.

The only person in politics even remotely open to reversing the status quo remains Trump.

Real Clear Politics has moved Minnesota into "toss-up" status because of Trafalgar Group poll

The poll has Biden beating Trump by only five points in liberal Minnesota.

"A five-mile stretch of Minneapolis sustain[ing] extraordinary damage" recently, per the New York Times, probably had something to do with it.

LOL, this didn't age well

$30 million affordable housing project torched in George Floyd riots in MN

'[T]he old polarizing politics is a spent force. The image of the "angry black man" still purveyed by sensationalists such as Ann Coulter and Dinesh D'Souza is anachronistic today, when blacks and even Muslims, the most conspicuous of "outsider" groups, profess optimism about America and their place in it'.

-- Sam Tanenhaus, The New Republic, 10 Feb 2013

Homeownership growth under Trump is slowing as of the end of 2019

Housing update: Case Shiller National Home Price Index hit 212 in October 2019, 51% above 140

The Case Shiller National Home Price Index hit 212 in October 2019, 51% above 140. The full data at the new iteration of the index since February 2018 is behind a registration wall. 

The 140 level was the level around which the index tracked for most of the post-war until the year 2000, in a range between 120 and 160.

Since then it's been as high as 235 in 2005 and 2006 during the housing bubble, and as low as 151 in February 2012 after the bubble sort-of popped. A real correction might have taken prices to 120 or even below.

Clearly the index never returned to the post-war experience, which was mostly slightly below 140. Keeping housing prices high became a Federal Reserve objective and bragging point after the Great Financial Crisis of 2008, achieved by manipulating interest rates lower.

The median sales price of an existing home in the US is currently $271,300 through November 2019, a price which is traditionally considered affordable to any individual making $104,346 per year and up.

Seeing that's just 8.5% of individual wage earners in 2018, the median sales price of an existing home is currently UNAFFORDABLE to 91.5% of wage earners.

Most people have to put together two incomes to afford such a house. But in a country where the median wage is south of $33,000 per year in 2018, two incomes only gets you to $66,000, which affordably buys you a house worth about $171,600 or so, $100,000 less than the current median sales price.

In my immediate vicinity, there's exactly two such single family homes on the market right now which are affordable to a couple making $66,000. Everything else costs much, much more.

This is a picture of declining equal opportunity.

LOL: Richard Spencer imagines 6-9% of US population is effectively alt-right, a vanguard just waiting for support from many multiples of that

Time for a Lenin haircut.

Meanwhile minimum 10% of US population directly allied with already socialist military, then add Pentagon's industrial complex and finally 79.5 million owner-occupied housing units, all just waiting for The Right Man to come along and end it all.

Hey Hey, Ho Ho, private homeownership has got to go, says anti-American Commie UCLA professor in The Nation

California’s Fires Prove the American Dream Is Flammable

If we want to keep cities safe in the face of climate change, we need to seriously question the ideal of private homeownership:

[W]e need to do more than upgrade the powerlines or stage a public takeover of the utility companies. We need to rethink the ideologies that govern how we plan and build our homes. ... The valorizing of homeownership and property rights results not only in increased exposure to climate-change-fueled fires, but also in our inadequate responses to them. ... This is the Jeffersonian agrarian ideal, transmuted through the urban, petrochemical century. Cheap energy—both the monetary price of subsidized gasoline and the hidden costs of fossil fuels—and the idealization of individual homeownership have created the scorching landscapes we face today. Cheap energy is untenable in the face of climate emergency. And individual homeownership should be seriously questioned. ... Even with the threats of climate change and rampant fire looming, the ideals of the American dream that have been instilled for more than 150 years will be difficult to dispel. ... We need another kind of escape route—away from our ideologies of ownership and property, and toward more collective, healthy, and just cities.

Merry Christmas: Your single family housing neighborhood is now banned by Democrats in Virginia and Oregon

Biden in the cat bird seat: Just as Bernie tanked after promising criminals will get to vote, Warren has tanked after hedging on Medicare for all

Ezra Klein, here:

One lesson of the past few weeks is that the Medicare-for-all debate has become a minefield for Democrats — and it’s not clear that any candidate has a safe path through it.

Sen. Elizabeth Warren has dropped 14 points since October 8, when she briefly led the Democratic field in the RealClearPolitics polling average. Most attribute her decline to her handling of Medicare-for-all — the financing plan she released made her the target of attacks from the moderates, and then the transition plan she released, which envisions a robust public option in the first year of her presidency and only moving to Medicare-for-all in year three, left single-payer advocates unnerved about her commitment to the cause.

The Democrat left has been its own worst enemy.

In addition to alienating working people by going soft on crime, the people who bear the brunt of it,  Bernie has notably lost ground with the working class by flipping on immigration restriction. Every new immigrant drives down their wages when immigrants are not taking their jobs outright.

For her part, on top of hedging on Medicare for all, Warren has rolled out a veritable cornucopia of crazy in this campaign, including a ban on all fracking in the US and ending the Electoral College. Combined with the recent lying about the little details of her life, voters justifiably doubt her sincerity on these larger issues and suspect that she cares about little except getting the power into her hands.

Hence the default candidate still on top, Joe Biden.

America's political institutions are still so structured that even when radicals like Obama do win, those institutions frustrate their aims. The upside of this is that harmful radicalism is usually stopped in its tracks. The downside is that mediocrities and grotesques are produced.

Just as Obama was content to let his Clinton retreads handle the Great Financial Crisis resulting in the still poor full time employment, moribund GDP, unaffordable housing and low interest rates catastrophic to income portfolios of the present time, Obama provided zero leadership on healthcare reform. This resulted in the competing Democrat House and Senate versions which consumed his first year in office, and eventually produced the Affordable Care Act camel, a horse designed by a committee. He sure did enjoy watching basketball in the private residence, though, and went on to make the Bush tax cuts permanent after winning re-election in 2012. Some radical, huh?

The same thing has happened with Trump. Although promising us the moon about immigration, healthcare reform and foreign wars, he instead delivered tax reform mostly for the corporations and huge spending increases for the military industrial complex, which is the basic consensus of the Republican caucus in Congress, foolishly hoping that they would give him a little somethin' somethin' in return.

Nothing doing. Even trade realignment will disappear when Trump does.

Trump's problem is that he never had a political faction holding any seats in Congress to drive his agenda. He just assumed the existing members would adopt his positions, which is pretty damn naive considering how he attacked and alienated them all throughout 2015-2016. Instead, Trump has steadily moved away from his own positions and adopted theirs, for his own political survival.

Trump's porous bollard fencing instead of the real wall he promised is simply the most public symbol of this, going back as it does to the George W. Bush administration.

The only radical realignment we have seen is the realignment of the radicals with their respective parties, and Election 2020 will be the same old, same old fight between them.

Those who won't realign get discarded.

This is the tyranny of the legislative. And the only way to remedy this is to repeal the 22nd Amendment to the Constitution, the great mistake of 1951. Only the threat of a Trump or an Obama perpetually in the White House will restore the balance of power between the three branches of government and advance the interests of the people who vote for the president.

As things stand, the best we can hope for is a president desperately stacking the courts to increase his power in a tyranny of the judiciary, which is hardly the remedy intended by the founders and is unacceptable to Americans loyal to the constitution and the nation as founded. The three stooges of the law schools on display at the impeachment hearing yesterday are proof enough of that.