You'll own no house, and you'll be unhappy with rising rent

Eliyahu Tulshinski

October 30, 2023

Two incomes are no longer enough for an average family to purchase a home. This represents an accelerated decline in Americans' standard of living where middle class citizens were once able to afford a home with just one breadwinner.

20% down not enough

According to a report by the National Association of Realtors (NAR), a couple's combined income now needs to reach at least $107,000 to qualify for a standard mortgage with a 20% down payment:

A new housing industry report shows that home affordability is plumbing staggering new lows, with the qualifying annual income for a median-priced home more than doubling from where it was in 2020 to a whopping $107,000.

The stark figure was revealed in the Monthly Housing Affordability Index, released on Oct. 25 by the National Association of Realtors (NAR).

The report shows that, in 2020, the qualifying annual income (based on a 20 percent down payment and a 25 percent qualifying ratio for monthly housing expense to gross monthly income) to buy a median family home was $49,680.

That's less than half of what it was in August 2023, the latest month of available data, according to NAR.

A separate Oct. 17 report from real estate data provider Redfin painted much the same (though slightly gloomier) picture, estimating that a homebuyer today must earn $114,627 to afford the median-priced U.S. home.

That's the highest annual income needed to afford a home on record.

Real estate rising

Housing costs skyrocketed an extraordinary 29% post-COVID to approximately $350,000 for an average home, according to The Zebra:

At the beginning of 2022, the average home price in the U.S. reached $348,079 — a record high set by low supply and increasing demand during the COVID-19 pandemic. . . . The national average home price in the U.S. climbed 29% since the COVID-19 pandemic began in 2020.

According to NAR and Redfin, home costs are considerably higher now:

Redfin estimates that, in August, the typical U.S. home sold for around $420,000, while NAR data puts that figure at $413,500—roughly the same ballpark.

Income not keeping up

The Census Bureau reports household incomes in 2022 to be less than $75,000.

Real median household income was $74,580 in 2022, a 2.3 percent decline from the 2021 estimate of $76,330.

Not enough

That $74,580 median income leaves the average household far short of the $107,000 income needed to qualify for a standard mortgage. The only option for most middle class families, then, is to save money each year they rent a home until they can afford to put far more than 20% down on a home. That would reduce the monthly mortgage payment. This is, of course, easier said than done with rising rents and other costs increasing while earnings are flat.

By intent?

The extensive Wikipedia entry for the World Economic Forum (WEF) does not contain even one mention of the words socialist or communist. Yet, the organization has been openly advocating for an end to private property. As one netizen posted, “You’ll own nothing and be happy” isn’t a conspiracy theory It’s literally from the WEF”

When it comes to living arrangements, it certainly appears that WEF policy is winning out, with home ownership becoming an increasingly distant dream. Scott Santens points out on his X account, though, that homes should actually be getting more affordable.

Historically, wages rose together with worker productivity. That was the case until the 1970s, after which the boon for increased productivity went almost exclusively to the top 1% of wage earners.

[I]n the 1950s we hadn't even invented integrated circuits yet, and yet someone with a high school degree could get married, start a family, buy a nice house, and live comfortably on one income, and that income was stable. Now with robots we have to WORK HARDER?

Globalism

Why did the extraordinary technological advancements since the 1950s not lead to an exceedingly higher standard of living today. How did the opposite prevail?

John Birch Society founder Robert Welch predicted decades ago that, without a change in direction, globalist leaders would bringing about a general economic decline, featuring “wild inflation," through ten gradual steps he outlined in an address to society members.

A part of that [globalist] plan, of course, is to induce the gradual surrender of American sovereignty, piece by piece and step by step, to various international organizations of which the United Nations is the outstanding, but far from the only, example. Here are the aims for the United States:

Greatly expanded government spending for every conceivable means of getting rid of ever larger sums of American money as wastefully as possible;
To higher and then much higher taxes;
An increasingly unbalanced budget despite the higher taxes;
Wild inflation of our currency;
Government controls of prices, wages and materials, supposedly to combat inflation;
Greatly increased socialistic controls over every operation of our economy and every activity of our daily lives - this is to be accompanied naturally and automatically by a correspondingly huge increase in the size of our bureaucracy and in both the cost and reach of our domestic government;
Far more centralization of power in Washington and the practical elimination of our state lines - there is a many-faceted drive at way to have our state lines eventually mean no more within the nation than our county lines do now within the states;
The steady advance of federal aid to and control over our educational system leading to complete federalization of our public education;
A constant hammering into the American consciousness of the horror of modern warfare, the beauties and the absolute necessity of peace - peace always on communists terms, of course; and
The consequent willingness of the American people to allow the steps of appeasement by our government which amount to a piecemeal surrender of the rest of the free world and of the United States itself. [Emphasis added].

Welch then implored his audience, in colorful language, to wake up.

So brush the insiders' dust out of your eyes, my friends, and the Communists soapsuds out of your brain, and ask yourselves:

“In all honesty, what on earth is wrong with the United States simply minding its own business or with having its foreign policy function primarily for the safety and benefit of the American people, which is exactly what we had done for the first hundred and forty years of our existence as a nation, to the incredible advantage of ourselves and everybody else, everybody, that is, except a numerically small clique of power lusting conspirators who had somehow inflicted themselves on a gullible world.”

You'll rent

Welch's economic warnings appear to have been justified. According to The Epoch Times, prospective homebuyers now face a “one-two punch” of high interest rates and a shortage of supply.

"U.S. housing affordability is worse today than the peak of the last housing bubble. The median American household would need to spend 44.6 percent of their income to afford the median priced home, a record high," market analyst Charlie Bilello said in a post on X. . . .

Sky-high mortgage rates and rising home prices due to short supply have delivered a one-two punch to prospective homebuyers.

“In a homebuyer’s ideal world, rising mortgage rates would push demand and home prices down enough to make up for high interest payments. But that’s not what’s happening now: Although new listings are ticking up slightly, inventory is still near record lows as homeowners hang onto their low mortgage rates—and that’s propping up prices,” Redfin Economics Research Lead Chen Zhao said in a statement.

And those interest rates are directly related to the “wild inflation” of which Welch warned.

Back in 2020, the benchmark interest rate set by the Federal Reserve was near zero. But soaring inflation would prompt the Fed to embark on its fastest pace of raising rates in decades, with the Fed funds rate now sitting at between 5.25 and 5.5 percent.

The Fed funds rate has an indirect impact on mortgage rates, which have soared from around 3 percent in 2021 to around 8 percent now. [Emphasis added].

Please see our additional coverage of globalist policies: