This Housing Chart Destroys The Arguments Of The Economic Optimists

This Housing Chart Destroys The Arguments Of The Economic Optimists (ZeroHedge, Feb 2, 2015):

Did you know that the rate of homeownership in the United States has fallen to a 20 year low?  Did you know that it has been falling consistently for an entire decadeFor the past couple of years, the economic optimists have been telling us that the economy has been getting better.  Well, if the economy really has been getting better, why does the homeownership rate keep going down?

Yes, the ultra-wealthy have received a temporary financial windfall thanks to the reckless money printing the Federal Reserve has been doing, but for most Americans economic conditions have not been improving.  This is clearly demonstrated by the housing chart that I am about to share with you.

If the economy really was healthy, more people would be getting good jobs and thus would be able to buy homes.  But instead, the homeownership rate has continued to plummet throughout the entire “Obama recovery”.  I think that this chart speaks for itself…

Of course this homeownership collapse began well before Barack Obama entered the White House.  Our economic problems are the result of decades of incredibly bad decisions.  But anyone that believes that things have “turned around” for the middle class under Barack Obama is just being delusional.

If the U.S. economy truly was in “good shape”, the percentage of Americans that own homes would not be at a 20 year low

The U.S. homeownership rate fell to the lowest in more than two decades in the fourth quarter as many would-be buyers stayed on the sidelines, giving the rental market a boost.

The share of Americans who own their homes was 64 percent in the fourth quarter, down from 64.4 percent in the previous three months, the Census Bureau said in a report. The rate was at the lowest since the second quarter of 1994, data compiled by Bloomberg show.

Rising prices and a tight supply of lower-end listings have put homes out of reach for some entry-level buyers, who also face strict mortgage standards. The share of U.S. homebuyers making their first purchase dropped in 2014 to the lowest level in almost three decades, the National Association of Realtors reported last week.

And it appears that this trend is actually accelerating.  During 2014, the rate of homeownership plummeted by a total of 1.2 percentage points for the year.  That was the largest one year decline that has ever been measured.

So why is this happening?

Well, in order to buy a home you have got to have a good job, and good jobs are in very short supply these days.

Over the past decade, the quality of the jobs in our economy has steadily declined as good jobs have been replaced by low paying jobs.  In addition, government policies are absolutely murdering small business.  At this point, small business ownership in the U.S. is hovering near record lows.

This has resulted in millions of people falling out of the middle class, and it has contributed to the growing divide between the wealthy and the rest of the country.

If our economy was working the way that it should, the middle class would be thriving.

But instead, it is being systematically destroyed.  If you doubt this, I have some statistics that I would like to share with you.  The following facts come from my previous article entitled “The Death Of The American Dream In 22 Numbers“…

#1 The Obama administration tells us that 8.69 million Americans are “officially unemployed” and that 92.90 million Americans are considered to be “not in the labor force”.  That means that more than 101 million U.S. adults do not have a job right now.

#2 One recent survey discovered that 55 percent of Americans believe that the American Dream either never existed or that it no longer exists.

#3 Considering the fact that Obama is in the White House, it is somewhat surprising that 55 percent of all Republicans still believe in the American Dream, but only 33 percent of all Democrats do.

#4 After adjusting for inflation, median household income has fallen by nearly $5,000 since 2007.

#5 After adjusting for inflation, “the median wealth figure for middle-income families” fell from $78,000 in 1983 to $63,800 in 2013.

#6 At this point, 59 percent of Americans believe that “the American dream has become impossible for most people to achieve”.

You can read the rest of that article right here.

The group that has been hit the hardest by all of this has been young adults.

Back in 2005, the homeownership rate for households headed up by someone under the age of 35 was approximately 43 percent.

Today, it has declined to about 35 percent.

From a very early age, we push our young people to go to college, and today more of them are getting secondary education than ever before.

But when they leave school, the “good jobs” that we promised them are often not there, and most of them end up entering the “real world” already loaded down with massive amounts of debt.

According to the Pew Research Center, close to four out of every ten households that are led by someone under the age of 40 are currently paying off student loan debt.

It is hard to believe, but total student loan debt in this country is now actually higher than total credit card debt.  At this point, student loan debt has reached a grand total of 1.2 trillion dollars, and that number has grown by an astounding 84 percent just since 2008.

If you are already burdened with tens of thousands (or in some cases hundreds of thousands) of dollars of debt when you get out of school and you can’t find a decent job, there is no way that you are going to be able to afford to buy a house.

So we have millions upon millions of young people that should be buying homes and starting families that are living with their parents instead.

Back in 1968, well over 50 percent of all Americans in the 18 to 31-year-old age bracket were already married and living on their own.

But today, that number is actually below 25 percent.  Instead, approximately 31 percent of all U.S. adults in the 18 to 34-year-old age bracket are currently living with their parents.

Something has fundamentally gone wrong.

Our economy is broken, and anyone that cannot see this is just being foolish.

2 thoughts on “This Housing Chart Destroys The Arguments Of The Economic Optimists”

  1. Great article. I agree completely.
    The housing market will have to crash in order for anyone to afford to live in one. It happened before in the 1930s, and the deflation in consumer goods are a forerunner for deflation in the US and EU, and a fall in housing prices. Housing prices are absurdly high, and it is just greedy guts keeping the prices up, nobody is really buying, just greedy corporations, and they pay far lower prices than the ones presented on the market for sale.

  2. I thought I would need a new power source for my laptop, went online and bought one to fit my machine for $12.00 + expedited shipping…… was around $15.00.
    They cost $55.00 two years ago in retail stores.

    Batteries cost $80.00 or more, just bought a new one (power cord isn’t the problem) for $12.95. Same brand, free shipping.

    This all indicates deflation to me….but with a twist. Certain things are far more expensive.

    Cameras cost more, but that is because more use the ones in their phones………..they are not as good………but good cameras are evidently a luxury item again as they used to be…….for a while, they sold them cheap to get people interested in them. A good camera will set you back a lot. I am glad I bought mine when I did, the price is nearly double what it was two years ago. Perhaps it is the privacy a separate camera provides……..???

    With a market gyrating in a trillion dollar range, that indicates to me we are into a rough storm. No matter how rigged the US stock market is, the rest of the world no longer follows their lead. An entire new economy has been built around the US and EU, it is making money, their members are earning, and the only difference is the fact they use an open basket of currencies, the US dollar is no longer the one used to complete all international transactions as it was in 2010. In January of 2010, 100% of all world economies completed international trades in US dollars.
    Today, it is 30% or less.

    Now that OPEC has dumped the dollar in attitude if not yet in open speech, the remaining 30% is probably lower than admitted. I wish I could find the data, but do not have access to it. The US dollar is down to the debt ridden EU, and even remaining supporters such as the UK, France and Germany are using alternate systems to avoid the dollar when possible. As long as their fool leaders continue to support US warmongering madness; they cannot openly express the truth…….that OPEC isn’t the only economic entity that is finished with the dollar.

    The US cannot wage war against the entire world……regardless of their lies and bullying, and even if they could, nothing can ever change the fact a world reserve currency is obsolete……and there will be no more of them. Technology, the brain child of the west, has rendered it’s status impotent.

    I wish I knew how much longer this madness can continue. The housing chart you present ought to tell the whole story. In the east, the political and social pressures have become too powerful. OPEC had to act if they were to retain face, and dignity is an important asset to these people. We used to have it over here, but greedy guts have ruined all reserve and cultural restraint. All in the west are like greedy children who gorge themselves on candy and other worthless foods………restraint is unknown to them.

    Housing was never meant to be an investment, it was to give one’s family a good place to live….that, and nothing more.

    What a waste. How depressing.


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