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Does This Look Like A Housing Recovery To You?

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Homeownership Rate 2014We just learned that the homeownership rate in the United States has fallen to the lowest level in 19 years.  But of course this is not a new trend.  As you will see in this article, the homeownership rate in the United States has been in a continual decline for more than 7 years.  Obviously this is not a sign of a healthy economy.  Traditionally, homeownership has been one of the key indicators that you belong to the middle class.  When people define “the American Dream”, it is usually one of the first things mentioned.  So if the percentage of Americans that own a home has been steadily going down for 7 years in a row, what does that tell us about the health of the middle class in this country?

The chart that you are about to view is clear evidence that we are in the midst of a long-term economic decline.  It shows what has happened to the homeownership rate in the U.S. since the year 2000, and as you can see it has been collapsing since the peak of the housing market back in 2007.  Does this look like a housing recovery to you?…

Homeownership Rate 2014

So many people get caught up in what is happening on Wall Street, but this is the “real economy” that affects people on a day to day basis.

Most Americans just want to be able to buy a home and provide a solid middle class living for their families.

The fact that the percentage of people that are able to achieve this “American Dream” is falling rapidly is very troubling.

There are some that blame this stunning decline in the homeownership rate on the Millennials.

And without a doubt, they are a significant part of the story.  They are moving back home with their parents at record rates, and many that are striking out on their own are renting apartments in the big cities.

This is one area where the decline of marriage in America is really hitting the economy.  Back in 1968, well over 50 percent of Americans in the 18 to 31-year-old age bracket were already married and living on their own.  Today, that number is below 25 percent.

But that is not all there is to this story.

In fact, the homeownership rate for Americans in the 35 to 44-year-old age bracket has been falling even faster than it has for Millennials…

In the first quarter of 2008, nearly 67% of people aged 35-44 owned homes. Now the number is barely above 59%. The percentage of people under 35 owning homes only fell five percentage points, to 36% from 41%.

So why is this happening?

Well, it is fairly simple actually.

In order to buy homes, people need to have good jobs.  And at this point, the percentage of Americans that are employed is still about where it was during the depths of the last recession.

In addition, wages in the United States have stagnated and the quality of our jobs continues to go down.  As I wrote about the other day, half of all American workers make less than $28,031 a year.  Needless to say, if you make less than $28,031  a year, you are going to have a really hard time getting approved for a home loan or making mortgage payments.

Things have been changing for a long time in this country, and not for the better.  Our economic problems have taken decades to develop, and the underlying causes of these problems is still not being addressed.

Meanwhile, middle class families continue to suffer.  One very surprising new survey discovered that more than half of all Americans now consider themselves to be “lower-middle class or working class with low economic security”.  While Wall Street has been celebrating in recent years, economic pessimism has become deeply ingrained on Main Street…

Optimism may be harder to come by these days. More than half of Americans surveyed in a Harris poll released Tuesday identified themselves as being lower-middle class or working class with low economic security. And 75 percent said they’re being held back financially by roadblocks like the cost of housing (24 percent), health care (21 percent) and credit-card debt (20 percent).

And that’s not the kicker.

“The most disappointing aspect is that 45 percent think they’ll never get their finances back to where they were before the financial crisis,” said Ken Rees, CEO of the Elevate credit service company, which commissioned the survey. “And a third are losing sleep over it.”

The only “recovery” that we have experienced since the last recession has been a temporary recovery on Wall Street.

For the rest of the country, our long-term economic decline has continued.

When I was growing up, my father was serving in the U.S. Navy and we lived in a fairly typical middle class neighborhood.  Everyone that I went to school with lived in a nice home and I never heard of any parent struggling to find work.  Of course life was not perfect, but it seemed to me like living a middle class lifestyle was “normal” for most people.

How times have changed since then.

Today, it seems like we are all part of a giant reality show where people are constantly being removed from the middle class and everyone is wondering who will be next.

So what do you think?

Is there hope for the middle class, or are the economic problems that we are facing just beginning?

Please feel free to share your opinion by posting a comment below…


  • gfmucci

    Here’s a concise list of reasons for lower home ownership rate:
    * Loss of jobs
    * More part time jobs
    * Lower paying jobs
    * Greater job uncertainty
    * Greater mobility/transience seeking work (renting is more cost effective)
    * Young adults living with parents
    * Young adults sharing housing
    * Stricter mortgage standards
    * Lower family formation rate; less need for a “home” vs. apartment
    * Boomer retirement into rentals

    These factors are all counteracting what should be a booming housing market, given the record low interest rates and relatively low housing prices. Fascinating!

    • Mudpie

      Yes it is. Also depressing.

    • piccadillybabe

      Not to mention that some pay up to $1K per month in health insurance. The high cost of health insurance for most really drains the net assets very quickly.

    • Priszilla

      Strict mortgage standards are better than sub-prime crisis.

      • bob

        Brought on by Obama (and acorn)forcing large banks to stop redlining in area banks knew they would never get their money back from.

    • Agitator9

      Housing prices are not low, not even “relatively” speaking, when they are still ten times the average person’s annual income. This housing bubble hasn’t even begun to burst fully. It goes back to the ’80s.

  • Mike Smithy

    Over the past 6 years, the banksters have absorbed the inventory as a result of QE1 (free money from the Fed). Home rentership is the new American Dream. The race to the bottom for the middle class is well under way.

  • Home ownership in the USA is a fallacy or mirage.

    Most of those home owners are just paying their mortgages on their casas. Even if they paid off their mortgage and own their casa outright, they still don’t own their casa. Because the minute they stop paying their property taxes, they lose their paid casas!

    Here in Argentina, people, even those who are poor, pay for their casas in cash (the mortgage rates are ridiculously high like 30% or something). So they actually own their casas. And if they stop paying their property taxes, they are NOT thrown out of their casas by the local police!

    Another wonderful factor living in “hell hole” Argentina!

    • Realtor

      Most of the people in Argentina inherit house from parents or relatives, so don’t BS those who know. In Argentina house is not investment but “roof on top of the head”.

      • Priszilla

        Isn’t that how it should be? The house is a home and the home belongs to the family?

  • alan

    I just bought a short sale in Colorado Springs for my son. It took 6 months of biding on places to finally get something. People were biding over full price, I was biding 15% under. One place I bid on sold the first day with 4 bids over full price. WFT!
    The place I got really doesn’t seem worth the price to me. I was looking at places on the lower end that the local wages would support. We almost got priced out.
    The agent said she had investor calling in to buy places, so I suspect this is people looking to move their money to hard assets. I think with all this extra cash floating around will cause prices to go up and stay there. I think we could end up like the Philippines, the average person won’t own a house, just work to eat. What a mess.

    • Realtor

      Yeah, smart people buy in smart places not in Argentina or some other God forbidden country LOL.
      Good luck smart move.

    • Priszilla

      Want to end up like the Philippines? Just prohibit birth control and double your population in 20 years.

  • Mondobeyondo

    This may come as a shock for some of the younger folks (the high school and college crowd) – but buying a house, for most people, is not going to be an option for y’all. Yes, nearly all y’all.

    The jobs it will take for an average young family to buy a home simply aren’t there for most Americans. If you’re lucky enough to get that welding job for $120,000/year (good luck!), you may be in luck. Also, don’t forget, interest rates are bound to go up in the future. Even if you can afford a home today with the low rates, that’s no guarantee that will be the case in the future.

    Otherrwise, prepare for a lifetime of renting. Hey, it”s better than homelessness!

    Sorry to burst your (housing) bubble…

    • No country like USA

      Hey Mondo watch your hemorrhoids, that’s the only thing ready to burst.

    • K

      Sad to say, I think you are right. Especially when you add in the college debt. Have you noticed as this blog gets reposted on other sights, the troll count is way up?

    • Anthony

      People need to consider multi generational living and communal living as possible options. Create a system where 3 or 4 generations of a family live under one roof mutually supporting each other.

      • Ian B.

        I already do that and it’s still hard to get by. Maybe a tent city is in the near future for me and my multi-generational family.

        • Mike Smithy

          The new American Dream is a tent.

          • Priszilla

            A tent is good anyway. Go camping in summer, and pitch the tent inside in winter to save heating costs.

      • Jo

        I would be happy with a nice truck and a camper- to live in permanently. That would be the life. If you get tired of one town you could move on to the next…no problem.
        People become slaves when they buy a house. Unless you pay for it outright the bank owns it not you. Then you have to pay taxes on it and insurance on everything you own, give me a truck and a camper- paid for of course. Renting is a good option if you don’t want to live like a Gypsy. Rent and let the landlord do the upkeep and pay the taxes. Home ownership is over rated.

        • piccadillybabe

          I have certainly given that lifestyle a lot of thought myself. If you have your own rig, there are a lot of options out there for quite an interesting life.

      • rebeljudes

        I LOVED this idea until I tried it…..I thought I’d save my family….help everyone…..they wanted to take advantage and NOT do anything to help….I couldn’t believe it….please let me know if anyone out there knows how to make it work, or perhaps has other ideas …I’m worn out trying…..ya can’t change folks….

      • bob

        How about a caste system to go with that

    • Marko

      I personally know two kids who were, “lucky enough to get that welding job” right out of High School. Not starting for $120,000, but they will be there in a few years. Both went thru the Welding Program at their High School instead of College Prep. The one young man was also specifically hired due to his being an Eagle Scout. His company is currently paying for him to go to Electrician’s School so with his welding and electrical trainings they can drop him in remote locations and he will set up infrustructure for oil wells and pipelines.
      The other is a young lady; the first female to graduate from the High School’s welding program. Upon graduation she had 3 companies bidding against each other to employ her. She ended up going with GE Aircraft Engines. Women welders are in high demand by contractors fulfilling government contracts.
      Today you must think outside the box.

      • Accros pond

        E moj Marko sta ove budale znaju.
        Samo kukaju I cekaju da im padne s neba, zato mi I uspjevamo ovde.
        Srdacan pozdrav.

        • none


      • none

        First there is a housing recovery!
        Look at all the building going on underneath the bridges nowadays!
        Please try to stay on subject, this is starting to get old talking about how you can land a job for $120,000 a year without getting a vocational skill!

    • Mudpie

      Lots of truth here. Interest rates are going to be the biggest shocker, I think. There is going to be a credit crunch, combined with inflation of prices relating to ordinary, necessary purchases. But do not put down welding. I have two doctorates and see the writing on the wall when it comes to future income producing opportunities. Even at middle age, I am transitioning into IT. You’ve gotta have it, and it can provide for a way out of the U.S. should this be necessary. Pay is average, but decent job security. Welders have even more. They key is to produce something real, not just push paper.

    • Priszilla

      Buying a house when young is an option when you will stay in one place for most of your life. For the modern employee that is flexible and moves where the job is, a rented home is better.

    • Cynical Guy42

      Is living in an RV a viable option, or will we be so poor not even that will be an option?

  • jo6pac

    I think everything in housing will be OK and might even get pumped up a lot because the so-called govt of the people just approved lower down payments and bad credit again because it worked so will the first time. What could go wrong. WTF

  • Mondobeyondo

    And oh yeah… a little bad credit never hurt anyone either.. ha ha hee hee ho ho. This was not quite the case in 2006 and 2007, but – a bad credit score may scare many mortgage lenders. A very bad credit score (bankruptcy, etc) may destroy your ability to buy a home, at least for the short term.

  • jakartaman

    I am hoping the republicans can take the senate so as to slow down the muslim commie in the WH. That said, nobody is going to fix what wrong with the USA. We are over the cliff and in free fall – When we run out of air the impact is going to be very ugly – Planning on within 2 years – good luck

    • Third Eye

      “Muslim commie” with that comment your entire statement is discredited…and both parties are under big money and wall street anyway.

    • sharonsj

      Obama is not a Muslim Commie, he is a complete corporatist. And Romney would have been worse. From a report by investigative journalist Greg Palast:

      “As part of a massive government bailout, U.S. taxpayers paid $12 billion to save auto parts maker Delphi Corporation. Out of that taxpayer money, three billionaires and their partners took in a profit of over $4 billion. One big winner, with a profit of over 4,000 percent, were the billionaires’ silent partners, Ann and Mitt Romney. The Romneys made at least $15 million, and as much as $115 million…

      “Of the 25,000 UAW members at Delphi, every single one lost their job. Delphi once had 29 factories in the U.S., now just one. Today, GM still gets its parts from Delphi, shipped from the plants that the Romney
      hedge funds have moved to the People’s Republic of China.”

      I bet you never heard any of this on Fox News….

      • JayC777

        Palast also called Maobama a “two faced liar”. Something you’ll never see on CNN, MSNBC, and CBS.

        • Nobody respects either “side” of our manufactured “political spectrum” anymore. A truly free people would have been organizing to topple the two parties rather than standing in line, Soviet-style, to buy iProducts.

      • TheSkeptic

        Or, the hedge fund one of Mitt’s sons was setting up. It came complete with a potential back door to the White House. When Mitt was campaigning for the governorship of Massachusetts, several Ampad employees wanted to confront him about their downsizing due to his hedge fund’s purchase of their company. Mitt and his campaign staff made a concerted effort to avoid these people.

      • J Kyle

        sad to say, but China is a much better business climate. Between the unions, and the thieves in government, and over regulations, any business that can, should move. I like Ireland myself, 10 % taxes.

      • Revolt to save America

        shut up, obvious you voted Obama, just sit down and shut up, ARE YOU BLIND ! !

    • jakartaman

      What part of Barack Hussein Obama don’t you get. What part of Being taught in a Jakarta Muslim school. What part of the fact his farther was a communist (mother a whore)
      What part of Valarie jarrett being Iranian with her brother a big shot in the Muslim brotherhood. What rock have you been living under that you cannot see that he is an enemy of the USA and wants to tear her down – Remember the apology bowing tour.
      Not president can be as inept as he has demonstrated without it being deliberate

      • TLC

        He is not alone in contributing in ‘tearing her down’. How about this bought and paid for do nothing Congress? BTW didn’t vote for Mittens Romney either

      • Revolt to save America

        well expressed, I am now your first follower. Its damn true, things are so bad, weekly we are having our liberties taken away, obummer is pissing off other world leaders who matter. We are falling like a ton of bricks, what we look like 22 months from now is anyones guess. HE IS GOING TO VETO anything he wants. THE people and our votes DON”T count he just overrides them. THIS IS SERIOUS DANGER to AMERICA. Our grandfathers woulda never tolerated such crap !, why aren’t the people standing up ! damn sheep, ,,,one reason ,, notice people dying to have a voice, it’s gotten dirty !

  • Bill

    Looks like this decline has been going on for some time while cnbc has had several head lines telling us quite the opposite. Oh how can that be?

    • Mike Smithy

      It’s all smoke and mirrors. A charade in which the media is culpable.

      • Agitator9

        Or at least complicit.

  • Coffeedrinker

    Making Life Choices

    Micheal, I see the gradual slipping of the American standard of living, as you have outlined above, but I also see (at the same time) Americans short-changing their futures by making poor career (life)choices.

    For example, I see as a good choice, college students that decided to take on student loans to finance their education. Because, investing in yourself will payoff over your lifetime. On the other hand, you only have yourself to blame (for your lower-class or under-class status) if you decided to not learn how to study while in government funded primary and secondary school and dropped out of school or decided not to continue to invest (in education) in yourself by going on to college or technical school.

    • Mike Smithy

      Unfortunately, I see way too many kids “invest” in themselves by going into debt by pursuing worthless degrees that are not marketable. In which case, the return on investment is less than zero.

      • Revolt to save America

        this is why I had my son learn welding and cnc programming right out of high school, those jobs average 20 to 45 an hour, and if he gets a few of his own contracts he will do very well. average pay is 35 an hour for an education that costs about 2k TOTAL and about 2 years of him life learning it. TRADE SCHOOL FOLKS, not college , learn a specific trade ! !!!!!

        • Zenithon

          Smart. Very smart. Don’t get caught up in the ridiculous college loan system for a degree you can’t make money with. If you have a very specific degree that offers a nearly guaranteed high paying career that you are very interested in, then do college, but don’t get caught up in the big expensive college thing. Go to an inexpensive state school (maybe even some community college), live cheap, stay out of debt, and work your way through (optimally in a job related to the profession you are going to school for).

          If you don’t have a specific well paying college career target in mind, find a good trade that interests you and go for it. There is a huge lack of skilled tradesmen in this country. Keeping a job will not be a problem with this option.

  • Homeownership, and indeed the entire middle-class lifestyle, in the US is a debt-based illusion created by banks in order to keep working people in line and to ensure they constantly grow the GDP per capita by consuming more and more unnecessarily. It is predicated on the continued importation of cheap oil from foreign markets, on massive public expenditure on maintaining oil-based transport infrastructure and a bloated military, on massive private expenditure in oil, automobiles, and home loans, and on indiscriminate buying of unnecessary iProducts.

    There is no technological solution to this. We need to move to a lower-consumption lifestyle and this involves giving up the middle-class delusion. The suburbs need to be knocked down, with the population moved either into central cities or into midsized outlying towns, with well-defined central business districts and linked to the central city by accessible public transit. Instantly, consumption of homes, automobiles, fossil fuels, home renovations, etc. will reduce sharply, but the standard of living will not reduce. Indeed it may increase, since fewer automobiles will pollute less and denser towns will be more walkable and bikable.

    As an extension of this, consumerism needs to end completely. Planned obsolescence in manufactured goods should be illegal and overall people should consume fewer unnecessary products. The finance industry that creates the credit to finance it all will as a consequence be shrunk significantly. Large corporations should be owned and operated by worker-chosen boards, with shareholders taking significantly reduced dividends.

    As a result of all of this, GDP per capita would probably fall by 20% or more in the US, and consequently pay would fall by about the same amount. However, living standards would increase markedly, as workers (anyone from line workers to engineers) would gain increased pay relative to GDP and the already rich would get less. Furthermore, such a reduction in GDP would be of unnecessary or forced consumption, not necessaries, ensuring a more stable economic system more resilient to any sort of global collapse.

    • Priszilla

      Well, instead of a super-large wooden shed in hurricane alley better opt for a small house made of concrete that doesn’t fly away, and doesn’t float away. One that protects anything and anybody inside, so you don’t need to replace all your belongings every autumn after the storm and again in spring after the flood.
      Maybe then you can also save some money for insurance.
      Then you can start accumulating wealth.

      My home is my castle.

    • Agitator9

      This sounds very good, but it doesn’t sound like our capitalism. Things would really have to collapse first . . . or maybe you know of some model places that are implementing such plans?

  • rburns

    There has never been any guarantee of having a certain economic status. College level education has been oversold and that scam has collapsed. There seems to be some sort of expectation that people are entitled to good results just because. The nation is returning to more normal times which is a smaller middle class, a powerful and wealthy upper class (small bunch) and a massive lower class. Young males especially do not know how to work nor understand that trades can be lucrative and rewarding. Our people have been indoctrinated to have certain expectations if they just follow certain “rules”. I have advised my adult children to invest time in learning additional skills especially in the trades. Those who rely on yesteryear’s rules will be severely disappointed as the years progress.

    • Mudpie

      College education as we understand it today is indeed a black hole for your hard earned money. Try community colleges and local 4-year schools. Work and do not go into debt.

  • DJohn1

    I spent five years as a licensed C-21 Real Estate Agent part time. I had a broker that believed in continuously educating us as to the changes rapidly coming in real estate sales. So I also spent about 5 hours a day trying to sell houses. Plus about 3 hours a week in education. I do not know it all.
    No one does. The local laws concerning real estate changing hands can be complicated. Inspections for instance.
    Entire school systems, libraries, and many other services depend on a continuous increase in real estate prices and real estate taxes to match.
    Historically housing has increased in value at approximately 4.5% per year. That meant that your house was a good investment over time. Your mortgage was the biggest problem. After putting a payment of 5%-10% down, no matter what the interest, you are paying 95% interest and 5% principal on a mortgage. That really does not encourage much investment in the property.
    FHA was founded on making little down payments on the mortgage amount. It went haywire when houses went up past 25,000 dollars.
    $4.5% was the average amount a wage earner got net raises on his job. It was no coincidence that the wage earner’s net money in pocket was the adjustment on prices increasing every year.

    What has happened is that the American wage structure has broken down. Starting around 1980, the labor board was fully in the hands of big business under President Reagan.
    Reagan presided over the breaking of the American Wage Earner and the chief reason wages went up. That was organized labor. We had a great deal of Republican(big business sponsored) government. It destroyed the Union labor movement in this country.
    The price of real estate depends strictly on demand. That demand is not there when the number of people capable of buying a home keeps going down the tubes.
    This did not happen over night. But in the last 20 years it has been happening as the American laborer lost control of our wages.
    But the problem is that a lot depends on those houses having value. This is truly the reason that many governments; state, federal, county, city . . . no longer have the financial tax base they had as little as 10 years ago.
    Then we got into Clinton era politics. The trade agreements that sold the American worker right down the river. But Democrats are supposed to be pro labor, right? Wrong.
    They are both prostitutes to big money and big business. They both betrayed the American worker.
    Today, we have far fewer people working than any time in the past. So the entire economy is going down.
    The taxes on which government operates no longer exists.
    So they are counterfeiting money in hopes of keeping it going.
    The irony of this is that a house is the only one going investment the middle class has that should be stable.
    Once you get off the rental trail of 15% increases in rent every year, then the little guy has a chance to break even with a house. With inflation at 4.5% per year if you keep a property for 7 years, then you have money in the form of assets. That is no longer happening.

    Right now the price of housing is going down to the tune of 10-20% per year. That is just the legal assessment of the local county accessor valuing the current market value of property for tax purposes.
    What will make sense is the person that knows how to fix up a property can have a place really cheap to call his own.
    Leave the outside of the house as you found it. Don’t give the tax people an excuse to raise the taxes on the house.
    Concentrate on the inside. Paint, Plumbing, Electrical, carpeting, those are the things to concentrate on.
    You are investing in having a much lower rent than you would if you had a landlord. This occurs naturally as the property is owned for a length of time.
    Plus you have the freedom of no landlord telling you what to do.
    If I was starting out today, there is a method of paying the taxes on a property to the state that are owed. In two years, if the owner does not pay his taxes back to you and I think it is 12% interest on top of that, then you own the property free and clear of any one having a claim on the property by state order.
    Foreclosed property has to get 2/3rds of the value of the mortgage. SO you have a mortgage of 100,000? The house must bring 67,000. That can be a house worth much more.
    You may get a house for less than half of what it is really worth this way.
    I suggest you be handy with plumbing, electrical, furnaces, painting, and carpeting if you take this route. Set money aside to do these things before you buy the house.
    Many people take advantage of this situation to reduce what it costs to have shelter.
    I know many people that have ended up owning a property outright without a mortgage in a very few years by doing what I have suggested above.
    So while the housing industry may look bleak. It is also an excellent market place for people with cash to work with.

    • Mudpie

      Big Labor and Big Business both suck. Absolutely.

  • rentslave

    There’s another factor at work here:TAXES.In some areas,teachers make as much as do professional athletes.The pensions associated with these jobs make it impossible for most people to pay the real estate taxes.Rent should be a tax credit.

    • kfilly

      There should be no tax deductions. We should move to a simple tax system. A flat sales tax. We can exempt things like food to help the poor. Our current system was written by the rich to benefit the rich.

      • Gay Veteran

        a flat sales tax would screw over the working poor and middle class

        • kfilly

          You are right. We should keep the system written by the rich to benefit the rich. That is working out great.

          • Gay Veteran

            did I say that?

      • Revolt to save America

        flat tax is no good !

    • Mudpie

      Taxes are indeed another squeeze. Govt. employees are making a relative fortune, with secured pension plans and time off that would make you gag if you earn an honest living.

      Whether we can ever reverse the decline is questionable. Too many govt. employees, programs, and regulations are completely entrenched and will kill before giving up their goodies.

  • mike

    Well, things have definitely gotten worse since the liberals took full control. Get out and vote these liberals out of their cozy jobs.

  • Priszilla

    Forget 2008. The peak was 2004/2005. The decline started 10 years ago.

  • Priszilla

    If you have to pay mortgage you don’t own the home yet. You own it when the house is not a collateral for a debt.
    Now please draw these diagrams again.

  • Thomas D Guastavino

    Just sold my large, newer home and moved to smaller, older home. I noticed that similar homes around me are selling quickly while the surrounding newer “McMansion” developments are going nowhere. Even the new townhouses seem to be going nowhere, likely due to the high cost. The only new construction that seems to be doing well seems to be over 55 and assisted living. If you want to predict the future, follow the demographics.

    • Ohio Loan Officer

      I’m seeing the same thing here in Ohio. The bulk of sales right now are low-end homes and foreclosures at steeply discounted prices. The 4 bedroom McMansions are sitting unsold.
      Big factors we are seeing—- college grads only making $12 to $15 an hour, and heavy burdens from student loans. We estimate the average college grad can afford 30% less house due to student loan debt. This drag on first-time-buyers is putting downward pressure on home prices.

    • Mudpie

      McMansions are a joke. I never did understand the need for the pursuit of housing status. What a waste of energy and life.


    Michael, as your columns have stated the economy is working extraordinarily well for the top 1%, very well for the next 9%, and not doing bad with the bottom 47% due to the Welfare State. The broad middle, the 43%, is wheezing and gasping. In short, the Middle Class is slip sliding away. The bottom 47% assumes the broad middle can continue to pay and the FED can continue to QE. A bad assumption IMHO.
    Time was the interests of the Ruling Elites and the population generally coincided. What was good for GM was good for America, etc. This is obviously no longer the case. Our government is far more interested in what is happening in China, Mexico and Brazil than they are here. The only success story I can really point to is Fracking, which is making us energy independent. Something I never thought I would see again in my lifetime. Without that, we would be swirling in the Toilet Bowl of Doom.
    How do we turn this around? First, we need to bring our jobs back home and put up tariffs. The Free Trade mantra (Nafta, Cafta, the TPP, yadayadayada…was an interesting experiment that has enriched the top slice and beggared the rest of us. Second, the Welfare State has to be reigned in. Third, retirement age must be raised to 75 with all earnings subject to SS and Medicare. Fourth, the Military Industrial Complex has to be faced down. We spend more on Defense collectively than the rest of the World. This must stop along with endless wars of National Liberation. Fifth, Wall Street has come to own Washington lock, stock and crock. This can be eliminated by a lifetime ban on going through the infamous “revolving door”. No lifetime pensions for our Congress Critters. Just 401ks. As it stands, our legislators rarely return home after they have seen the lights of DC. Indeed, the wealthiest counties in America surround DC. Increasingly DC represents the interests of foreign powers and has become an occupying power. The provinces wither on the vine. Sixth, eliminate the direct election of Senators and return that power to the State Legislatures so balance will be restored between DC and the rest of the States.
    I could go on but you get the idea. The average man is being shunted aside and has been turned from a citizen into a serf in my lifetime. Turn it around or we shall become a dystopian society like Sao Paolo. What are the chances of all or any of this happening, slim. Very slim. All I can say is the natives are restless and they have every right to be. I vote but only out of habit. Conviction went out the window some time back.

    • kfilly

      Don’t forget term limits as a politician that has to go live under the laws he passed is likely not to pass stuff he won’t like while out of office.



  • Sandbagger

    That graph could also be interpreted as showing the run-up of sub-prime loans mixed with quality loans. Run-down shows the repos. I’d like to see a graph that only shows the loans that were not sub-prime. I’m sure we’d see a decline, but not as dramatic as that!

  • JailBanksters

    Somebody has to own the Home, even if they are run down , bordered up homes, they’re all owned by somebody. If you don’t own it, that means a Bank owns it and if Bank doesn’t own it that means the Federal Reserve owns it. And as all the Major Banks and Federal Reserve are all owned by the Ju’s, well you get the picture.

    “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…I believe that banking institutions are more dangerous to our liberties than standing armies… The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
    : Thomas Jefferson

    • Mudpie

      I agree with Tom J. to the extent that the banks have, via corrupt political ties and legislation, now basically come to own the govt.

  • Mike Smithy

    Yes, it’s true. The EBT card is the new bread line.

  • Mike Smithy

    If you like your incompetent government, you can keep your incompetent government.

  • Joe Kleinkamp

    Even if you have an income that can easily handle the mortgage payment you need to accumulate a 20% down payment and have an established and stellar credit history. Home sales look even worse for the middle class when you consider that nearly 40% of recent home sales were cash deals i.e. to investors or the affluent.

  • MerlinsOwl

    I see a lot of people talking about prices going up and I know for a fact that is not happening. Here on the outer banks ,nc most of the houses here are people’s rental properties/ second homes and they are coming to realize the expenses of flood insurance taxes and the true cost of replacing half your roof every year from storms and there are for sale signs every other house. There are homes here 200,000 lower than their price 5 years ago that still have zero to few offers to buy. As another reference to nc housing prices as that is my home, I lived in winston Salem and often staged houses with furniture for sales and have seen 2 million dollar houses going for 1.3 and million dollar homes going for under 700,000 and still sitting unsold for as long as 3 years while being continually shown. That’s the truth.

  • DJohn1

    In my experience as a Real Estate Agent, I once was privileged to know a very successful person and he was living in one of the lowest income areas of town at the time.
    What this person did was he bought a small three dwelling apartment building in the poor white section of town 50 years ago. Now this was when discrimination was allowed and this particular population was mainly from poor white Kentucky. We live in Ohio.
    Down the road at the time was Frigidaire. Most of the people could walk to work from his apartment house.
    I doubt seriously if he paid more than the minimum for the building. He rented the two lower apartments out for $200 a month and he included utilities in the 50s and 60s. When I met him he was an old man and he was ready to get out and live in Kettering. Kettering is an upper middle class neighborhood.
    This was the 80s and Real Estate did not sell very well because of the Reagan era 18% interest rates on home loans.
    The building in the 80s had to be 1912 or thereabouts.
    He had long since paid it off and everything he made went to maintenance and profit.
    At the time we had 19 year devaluation tax breaks on all property. I suspect he had taken full advantage of that too.
    That meant that he wrote off the cost of the building over 19 years on his income taxes.
    He already owned a nice home in Kettering. So he was simply cashing out.
    It was common back then for two owners to swap properties and then they continued to get fresh 19 year tax breaks forever.
    He had a nice two bedroom apartment that he lived in upstairs to the two downstairs single bedroom dwellings.
    Congress has managed to take the advantages of rental property away from the IRS rules over the years.
    And that basically is what is wrong with Real Estate today.
    If I were to purchase investment real estate I would have to be a lot harder person than I am. I do not feel that I have what it takes to evict people when they cannot pay their rent so I own no rental property at all.
    But if you are that hard hearted and are able to evict people then this might be a good investment for you. Not this particular property but others.
    There are a lot of good people out there that have not the heart for the business and I am one of them.
    I mention it because this is one way you can live rent free pretty much for ever. It does take a talent for fixing everyday problems that will occur in any rental property like toilets backing up and faucets going wrong. Electrical outlets die on a regular basis if you use too cheap a part.

    You also have to have insurance and taxes money set aside to make it work. The property has to be self-supporting.
    Everyone has to have a place to live. Whether it is an FHA Section property or a mobile home, or something far nicer, eventually it is 40 below zero in the winter and you have to have shelter somewhere.
    Salvation Army people put a lot of people up during hard winter weather.
    There is the problem of finding good tenants. No one has good tenants 100% of the time. So you have to have rent money in advance to cover evicting them and fixing the damages these pigs cause. And they will destroy a rental sometimes if they are angered over something.
    Most landlords today have an association that grades tenants. But refusing a tenant can lead to legal suits of discrimination so it is best to document everything.
    Right now there are huge bargains out there on some fairly decent real estate that would normally never be on the market. That is the back side of declining property values.

    • Mudpie

      But what if they continue the decline? What if interest rates move back up to even average historical levels? Think it was hard buying under Reagan? Houses even then were seriously cheap. We lived in a $160,000 house that was quite large. Today it would sell for $500,000. Imagine financing that at even 8% interest, for most people. No way. No way.

    • Revolt to save America

      you talk elementary. I’m a broker just because I am a landlord. I rarely evict, I had 14 tenants and in past 3 years 1 eviction, it’s because tenant wanted to use her money for other things than rent. You can have a big heart and be a landlord, don’t stereo type. matter of fact I rent to a single mom with 6 kids for 5 years, works fine and I sold 2 homes for little down to 2 single moms with management jobs at fast food restraunts, but they where hard working and pay me on time and they own, I carry the paper, I fix nothing, we all win. If you can think outside the box you can do plenty, buy low, give people a chance to own the American dream. I am doing it and I will tell you, in life, the more you give, the more life treats you good. It’s like Angel investing. I make money and I fulfill their dream. Also I make sure their mortgage to me is close to what it costs to rent. I also have 3 rentals and I bought a place for my brother to live in . and by the way I was a mom young on welfare and I didn’t want to be stuck in the system. Now that I have been on both sides of the track I know how much it woulda have meant to me to receive what I offer people. The homes are 150k range, and they where 300 in 2005 and 55k range in 2009, This leave room for everyone to gain. Have a Great day, Broker by trait, humanitarian by HEART .

      • DJohn1

        You have your act together!
        I do not believe in using big words. Though I do know a few. You obviously do your homework before renting to anyone.
        The houses on paper are down in price from what they were at their peak.

        When and if the jobs come back, then the prices on housing will go up just as fast as it came down.
        People will look back on this time and wonder why they did not take advantage of the lower prices.
        I once knew a very wise lady in South Korea. She owned an entire complex of apartments and rented them out.
        She was about 20 years older than I. But she liked me. We often talked. She imparted many pieces of wisdom to me because I was a good listener.
        I taught my 3 boys computer science. They are network engineers and in demand. Only one has completed college. Businesses call my boys when the IT people need help solving a problem.
        They are far beyond my knowledge of a computer now.
        When I was in the business I chose a broker wisely. He believed in teaching us all the updates in the evening once a week. In the process, I learned salesmanship.
        I have a daughter who is a single Mom. With a lot of manipulation, she has her own house. We watch our Grandchild every day and he is in K12 online schooling.
        I do know where you are coming from.

  • Mudpie

    Agreed but if we can slow the tailspin there is more time to prepare. I despise the GOP but it is only 1/2 has bad as the Democrats.

    • Gay Veteran

      really? after our war of aggression against Iraq which cost this country $TRILLIONS?

  • piccadillybabe

    Back in the day (1950-60s) many men rose to the top of their careers with nothing more than a high school education. They were trained on the job and stayed with it until retirement. Now days, there are no guarantees but even to be granted an interview, I am sure you need some kind of initials behind your name. The competition must be fierce out there and if you do get a good job be sure to watch your back because chances are there will be some who will not be happy for you.

  • Casino666

    A very few own their home.., the bank does in most cases! So they “rent” it from the bank..! Most are never gonna pay it off.

    And then you have all the taxes and you have to pay for whatever there is to repair – which is as mention the banks house!

    Remember – you don’t own anything before its paid off.

    • Revolt to save America

      I paid off my home in full 10 days ago, I can live with taxes and repairs, it’s such a relief especially living in burbs of los angeles and in a home worth over 1m. I just didn’t wanna pay interest while money sat collecting .70 at the credit union. Rental properties are also becoming an issue, tenants late and tenants broke, ONE sure thing is I don’t have that 2k mo mortgage , but there is no promise of tenants paying rents. Conservative moves are good in unpredictable times like these. we are headed down !

  • TheSkeptic

    If your dad was in the Navy and you were middle class, your dad was not a member of the working (enlisted) ranks. The chosen few in the military are middle class.

  • Mary Ann


Finca Bayano

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