I think it is safe to say that investor activity in the housing market has changed the face of real estate buying. Back when the crisis hit in 2007, some analysts were cheerleading the hedge fund crowd as a tiny blip in the market. It is hard to call it a blip when 30 to 40 percent of all purchases are going to investors for close to half a decade. A recent analysis from RealtyTrac found that the estimated monthly home payment for a regular three bedroom home (costs include mortgage, insurance, taxes, maintenance, and subtracting the income tax benefit) rose an average of 21 percent from a year ago in 325 US counties. What about household incomes? That is another story. So it is no surprise that we are largely becoming a nation of renters. It is also no shocker that young households are largely unable to begin household formation via buying a home. Many are living with parents well into “young” adulthood. For the first time in history, we had a six year stretch where we added more renter households than that of actual homeowners.Many details in this post.
Dr. Housing Bubble
Serfdom nation
A principle feature of The American Dream is owing one's own home. That possibility is becoming more and more remote for more and more people. If this crystallizes, it is going to change American culture in ways that cannot be foreseen. But it is quite foreseeable that the consequences will be profound socially, politically and economically.
So that proves that the economic data for 2013 is filled with refinancing, flipping, consolidation, and cost cutting in all industries not just homes.
ReplyDeleteTherefore, renting is an indicator of lack of government spending to help the economy.
The deficit is too small, but good luck telling anyone that because that is the proverbial glass ceiling brick wall for MMT making MMT almost fiction.