Beyond The Horizon

ICYMI: How Americans Have Been Priced Out Of The Housing Market

Over the past five years, the cost of homeownership has seen a significant increase, making it more challenging for many individuals and families to afford buying a home. Several factors have contributed to this trend:

Rising Home Prices: One of the primary drivers of increased homeownership costs is the surge in home prices across many regions. Demand for housing has outpaced supply in numerous areas, leading to bidding wars and inflated prices.
Interest Rates: While interest rates remained historically low for several years, they have started to rise in recent times. Higher interest rates mean increased mortgage payments, making homeownership more expensive.
Property Taxes: Property taxes have also increased in many areas, driven by rising home values and budgetary needs of local governments. These taxes add to the overall cost of homeownership.
Insurance Costs: The cost of homeowners insurance has been on the rise, particularly in regions prone to natural disasters such as hurricanes, wildfires, and floods. Insurance premiums can significantly add to the financial burden of owning a home.
Maintenance and Repairs: As homes age, they require more maintenance and repairs. The cost of materials and labor for home improvement projects has increased over the past few years, making it more expensive for homeowners to keep their properties in good condition.
Regulatory Costs: Compliance with building codes, zoning regulations, and other legal requirements can add to the cost of homeownership, especially for new construction or renovations.

These cumulative increases in homeownership costs have made it increasingly difficult for many people to afford to buy a home. As a result, homeownership rates have stagnated or declined in some areas, particularly among younger generations who may struggle to save for a down payment and qualify for a mortgage in the face of these rising costs. Additionally, the disparity between income growth and housing costs has widened, exacerbating affordability challenges for low- and middle-income households. Overall, the combination of factors contributing to the rising cost of homeownership has made it a significant financial challenge for many individuals and families.

In this episode, we explore the issue.

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to contact me:

bobbycapucci@protonmail.com

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The average US house now requires a salary of $106k-a-year - $50k more than in 2020.... how much is needed in YOUR hometown? | Daily Mail Online

Duration:: 15m
Broadcast on:: 29 Jun 2024
Audio Format:: mp3

What's up everyone and welcome back to the program. I don't think I'm telling anybody out there anything new when I tell you that the housing market is absolutely screwed up from overpricing to not enough houses in some areas. We have seen a whole host of problems hit the housing sector and in reaction to that we have seen a lot of Americans and their hopes and dreams to own their own home someday go up in flames and that's because now you have to have a salary of $106,000 a year to own a home. In 2020 you only needed $56,000 a year as your annual income to buy that very same home. And now a mere four years later we have a $50,000 increase. How the hell is that sustainable and how do they expect the working class to ever afford a home? Today's article is from the Daily Mail and the headline. The average US house now requires a salary of $106,000 a year, $50,000 more than in 2020. How much is needed in your hometown? This article was authored by Tilly Armstrong. Perspective home buyers need to earn $50,000 more than they did in 2020 to be able to afford the average home in the US. Grim new research reveals and that shit is grim. When I was younger and we first moved to Las Vegas in 1989 my parents were able to buy their home in the early 90s for pennies on the dollar what it's worth today. I mean their home is worth three or four times what they paid for it. And a lot of that is artificially built up because of the market the way it's going but there's no doubt that the increase in prices when it comes to homes has not only been insane but it's also unsustainable because nobody out there for the most part is going to be able to keep up with this in the long term. So in my opinion we're going to see a problem in the housing market and we're probably going to see a bit of a collapse. Maybe not like what we saw in 2008, 2009 but I think that we're headed for a correction and I think that correction is going to cause a lot of pain for people. Now one thing I will say though about a correction that comes opportunity for people to get into the market maybe and get themselves the home. Traditionally speaking whenever there's a correction that's the perfect time for people who might have been on the sidelines waiting to strike to get involved. So there might be some of that coming but with the demand for all these homes and the shortage when it comes to homes I don't think it's going to be that kind of free for all that we saw in 2008 and 2009 and remember how cheap loans were. So things are a little bit different in this upcoming landscape, there is no doubt about it. Buyers must make $106,000 to be able to comfortably afford a property according to data from Zillow which looked at the 50 biggest metro areas across the US. That is up more than 80% from the 59,000 required in January 2020 laying bare the challenges Americans face being able to get and then pay for a mortgage. And we recently talked about the repossessions of cars, there's a lot going on when it comes to the housing market as well. A lot of repossessions, a lot of people can't make their bills. And how does it start? Well it starts with "I can't pay my credit card, I can't pay my car payment." Those are the first two bills that you go after right because you can live without a car you can live without your credit card but you have to have a home. So when you start seeing all of these homes start to default then you know that things are really really heating up. But the amounts needed vary dramatically across the US and three of the most expensive cities an annual salary of more than $200,000 is needed up by at least 78 grand since before the pandemic. Even needing $200,000 a year to just get by in a city, I wouldn't live in that city anymore. As much as I love it, there's just no way. How many people out here are making 200 G's a year? Looking at the average home across the US, the monthly mortgage payment has nearly doubled since 2020 up a huge 96.4% to an average of $2,188 assuming a 10% down payment. So not only are you getting screwed on your monthly payment but you better come correct with that 10% down and can someone explain to me how you're supposed to save 10% down for your home when everything else is burying you when you're caught in the quicksand known as life. You look at the numbers and most Americans they can't even afford a $500 emergency bill. So where are people getting 10% for a house that's inflated up to 700 grand? Can somebody please explain that to me? Mortgage rates ended January 2020, near 3.5%, while they then plummeted during the COVID-19 pandemic, successive interest rate hikes have caused them to double in recent years. According to latest data from the government back lender, Freddie Mac, the average 30-year fixed rate mortgage hit 6.94% as of February 29. This marked an increase for the fourth consecutive week. I mean, really, let's just pile it on, huh? And this is what I'm talking about with the financial sector as well. All these dirt bag bankers that love to give you these kinds of percentages that love to just squeeze you to death? It's crazy, you'd get a better rate going to the local cricket nose and getting a loan from the guy in the neighborhood. Now of course, if you don't pay back the cricket nose, it's not just your credit report that's gonna hurt, but both of your legs. But the point is, you have these bankers out here charging three, four points where cricket noses in the neighborhood. If you know them, you'll get a point, point and a half maybe. That's why a bottle is my mind when people don't understand that the financial sector is really the enemy here. It's not your neighbor. It's not the guy who voted for Trump or the guy who voted for Biden. It's these financial sector dickheads who are keeping us all as slaves to this debt. Then they just keep piling it on, piling it on, and whenever they get in trouble, well, what happens? That's right, we bell them out. The government writes a bell out. These guys all get paid, and it's up to you and I to pick up the pieces. Time in and time out and make no mistake, if we get to that point, this time around, the same shit's going to occur. Alongside higher mortgage payments, home values have also risen significantly since January 2020, creating a perfect storm for prospective buyers. According to Zillow analysis, home values across the US have risen 42.4% in that time to an average of around $343,000. In the old days, if you bought a house for $343,000 in Las Vegas, you were living high on the hog. Now you can't even get a home in, you know, a lower to middle class neighborhood for less than 400 G's, and that's not because the wages have went up so much here in Vegas. It's because a lot of people in California have sold their homes for a huge profit, and then they moved to Las Vegas and they buy homes in this market. And then the folks here, well, they get priced out. They can't afford to spend, you know, 400 grand on a house that's only really worth 260, but people who had a windfall from a gigantic payday in California from selling their home, they're able to do that. So what happens is you have these cash buyers that come in and they take over the whole market basically. In 2020, a household earning $59,000 annually could comfortably afford the monthly mortgages on a typical US home it found spending no more than 30% of its income with a 10% down payment. The necessary income was below the median US income of 66,000, meaning more than half of American households had the financial means to afford home ownership. Now, the roughly $106,000 needed to comfortably afford the mortgage payment on a typical home is well above what a typical household earns each year, which is estimated at about $81,000. And I'm sure that's where most people fall right into that range, 80, 100 grand, you know, when you're adding in what you're making with your wife or your girlfriend or whatever, that's right around where most people land. And that's usually a pretty comfortable life, right? 80 G's a year, it used to be try to get to that six figure mark. If you can make 100 G's a year in America, you are living life good. Now you got to make 100 G's just to even get buy-in some places. So you tell me how that's working out for the working man. While everybody's arguing over the bullshit, these banksters, well, they're laughing all the way to the bank with your coin in their pocket. Housing costs have soared over the past four years as drastic hikes in home prices, mortgage rates, and rent growth far outpaced wage gains, said Orphan, Divinee, a senior economist at Zillow. Well, there's no doubt who here has gotten a gigantic raise lately. Only not me, my advertisement dollars have absolutely collapsed compared to where they were in 2021. So I know everybody out there is feeling it. And then you have the audacity to get up here and try and gaslight people and tell them that the economy is going great and everybody's doing fine. Well, I have news for you. That's not the case. That's not true. Most people out here are feeling it and most people out here are struggling. And if you think that's not going to have an effect, calm the election, you're crazy because it's not all of the crazy folks on either side that's going to sway this election. It's the independence. So all you people out there that are in your bunker that are, you know, talking about this one or that one, probably a good idea to try and sway those independent voters instead of trying to shame them to vote your way. And we see a whole lot of that going on. A lot of people trying to shame independent voters to vote one way or the other. And I have to tell you, as an independent voter, that shit don't work. I'm going to vote for what's best for me and my family. And I don't care what anybody thinks or says about it. And for me, that means not voting for any of these incumbents. Buyers are getting creative to make purchase pencil out and long distance movers are targeting less expensive and less competitive metros. For a household making the median income, it would take almost eight and a half years before they would have enough safe to put 10% down on a typical home. Zillow said about a year longer than it would have been in 2020. It's no wonder that buyers are looking toward more experimental avenues to home ownership, including younger Americans who are living with their parents in order to save up for a down payment. Oh, yeah, because, you know, the parents, they're loving that. I'm sure. Let's have Tom Dick and Harry move back in and go live in the garage because the government can't get their shit together. Sounds like a great idea. While home values are largely rising across the U.S., there is some disparity among how much Americans would need to earn to afford a home in different major metro areas. And I know people will say, well, just move, move to a different state. No, thank you. I like where I'm at. Here's an idea. Why don't my politicians do the right thing and fix the prices? Well, that's because they're all getting rich on this shit too. Everybody's getting rich, but you and me. The metro area where a buyer could comfortably afford a typical home with the lowest income is Pittsburgh, where they would need $58,232 salary according to Zillow. I mean, no offense or anything, but I have no desire to live in Pittsburgh. It's cold there. In Memphis, they would need $69,976 in Cleveland. They would need $70,810 in New Orleans. They would need $74,048 and in Birmingham, Alabama, they would need $74,338. Meanwhile, there are seven markets among the major metros in the U.S. where household income must be 200 grand or more to comfortably afford a typical home. 200 Gs. What are you a lawyer? Who out there is making 200 Gs a year? Unless you are somebody who is highly trained and highly specialized in something. That seems like a exorbitant amount of dough. The top four areas are in California. Well, that's a shock. In San Jose, home buyers would need an income of $454,296 in San Francisco. They would need $339,864 in Los Angeles. They would need $279,250 and in San Diego, they would need $273,613. Now, just as an example, the quarterback of the San Francisco 49ers, Brock Purdy, he couldn't afford to live on his own up in San Francisco on his rookie contract. He had to have a roommate, the quarterback of the team in the Super Bowl. Yeah, there's no disparity here, though. Everything's fine, folks. California is just, you know, gliding to a fantastic landing here. Stop the bullshit. Nothing's good, nothing's fine, and nothing is certainly okay. According to Zillow, prospective homeowners would need to earn $213,984 in Seattle, $213,615 in New York City metro area and $205,253 in Boston. But some experts predict that there will be a shift in the housing market in some parts of the U.S. this year driven by a surge in baby boomers downsizing into smaller properties. Analyst Meredith Whitney, who is known as the Oracle of Wall Street, after she correctly predicted the 2008 financial crash, forecast house prices in some states will fall in 2024. This in turn will free up inventory and bring down costs for the first-time buyers. Whitney said homes in New York, New Jersey and Ohio will see a fall in prices. By comparison, homes in Texas, Tennessee and Utah will remain strong, she said. She told DailyML.com, around 90% of housing stock is owned by over 40s, while 74% is by those over 50. It makes logical sense that lots of these owners will start to downsize in the next decade. That's almost 35 million homes. It's a huge number to go through the system. There's no doubt that there's going to be some homes available, but what does it matter if prices are sky high and people's salaries aren't catching up. So people who want to own homes, they're really up against it. And it doesn't seem like there's any relief on the way. So people out here, what do they have to look forward to? If they can't afford a home, if they can't buy their own house and they're stuck in the cycle of renting forever, who does that make rich? Well, we all know, and the entity and the group that's going to get rich from this, like every other, travesty, like every other disaster, is the financial sector. They'll continue to count their money and swim in it like Scrooge McDuck, while the rest of us are over here stealing from Peter to pay Paul. Alright folks, that's going to do it for this one. All of the information that goes with this episode can be found in the description box.