November 11, 2024

The Cost of Owning a Home Is Soaring

By Charles Hugh Smith

The soaring costs of home ownership are changing the metrics of unaffordability in important ways.

We all know that buying a house is now unaffordable, but owning a house is increasingly unaffordable, too. Gordon Long and I have laid out the sobering explosion of the costs of homeownership, a rise that shows no signs of slowing, much less reversing.

It would be nice to attribute it all to one source or one villain, but alas, it isn’t that easy. Costs are rising across the board for many reasons, none of which are reversible by enacting a policy tweak or two.

For context, let’s start with inflation since 2020 and the cost of buying a house. Truflation pegs the aggregate inflation (a.k.a. loss of the purchasing power of the US dollar in our domestic economy) at 26% since January 2020. All else being equal, we would expect the cost of housing to have risen by about 25%.

But according to the Case-Shiller national housing index, which tracks the purchase prices paid for each house over time, housing costs rose an eye-watering 45% since January 2020, as the index soared from 220 to 320.

Traditionally, the primary cost of home ownership everyone tracks is the mortgage payment, the famous monthly nut of principal and interest, which of course goes up with the purchase price and the interest rate of the mortgage.

As we all know, both the purchase price and the interest rate have gone up significantly, pushing the mortgage payment as a percentage of median household income up to levels that exceed the previous peak in Housing Bubble #1 circa 2006-08.

If inflationary pressures remain elevated and the bond market isn’t buying the “inflation is fading” story, then mortgage rates might not drop even if the Federal Reserve cuts the Fed Funds Rate.

But the mortgage payment isn’t the only cost of owning a home. All the other costs that were relatively affordable in decades past are now skyrocketing. Gordon listed the six basic categories of home ownership expenses: mortgage, property taxes, insurance, utilities, maintenance and repair and home-related services.

Anecdotally, we’re hearing accounts of basic home insurance jumping from $3,000 to $13,000 annually in high-risk regions. We’re also hearing of insurers abandoning high-risk areas and entire states, leaving homeowners with few options for insurance. In response, some homeowners are “self-insuring,” i.e. they have dropped insurance coverage.

The problem with this option is that should the worst-case scenario come to pass, as a general rule the federal disaster relief agencies will pony up a maximum of $40,000 to the uninsured–far from enough to rebuild or repair a severely damaged house.

Insurers are not in the charity business. Once their losses run into the billions of dollars, they jack up rates to restore profitability. Recall that insurance is a global enterprise, and so the cost of our insurance is partly based on the cost of the reinsurance the big carriers purchase globally. If reinsurance rates rise, everyone’s rates rise accordingly.

Unsurprisingly, homeowners are responding by raising the deductibles in their policy to lower the annual cost. This is a hybrid of “self-insurance,” as homeowners with high deductibles have to have the cash in hand to fund the cost of repairs up to the deductible ceiling.

If you think the rise in the price of groceries is eye-popping, check out property tax increases, which are pushing 30% nationally. Since local governments depend on property taxes for a significant percentage of their revenues, we can expect these taxes to remain “sticky” even if housing valuations decline.

The costs of maintenance and repair are soaring as well as the costs of construction materials and labor have increased, along with the other costs of doing business. Just as the cost of a sandwich or burger seems to be about $15 everywhere, the cost of any home project other than fixing a leaky faucet seems to be $10,000 or more now: tree pruning: $10K, roof repair, $10K, and so on.

The soaring costs of home ownership are changing the metrics of unaffordability in important ways. It’s not just the initial purchase price that defines what’s affordable and what isn’t; so too do the costs of owning the house after our name is on the property tax rolls.

The Slow Death of the Single Family Home (30:57 min).

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source:

Activist PosT

https://activistpost.com/2024/11/the-cost-of-owning-a-home-is-soaring.html.

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FEDERAL RESERVE / Η Federal Reserve δεν είναι υπηρεσία της κυβέρνησης των ΗΠΑ.

FEDERAL RESERVE

 Νοεμβρίου 10, 2024

 Ο πρόεδρος της Federal Reserve Jerome Powell λέει ότι αρνείται να παραιτηθεί εάν #Trump του ζητήσει...

Η Federal Reserve δεν είναι υπηρεσία της κυβέρνησης των ΗΠΑ.

 Είναι μια Ξένη εταιρια που ιδρύθηκε χωρίς τις ανησυχίες του αμερικανικού λαού για να εκτρέψει τον ΠΡΑΓΜΑΤΙΚΟ ΠΛΟΥΤΟ στα χέρια υπεράκτιων παγκοσμιοποιητών. 

Ήθελαν να κρατήσουν τη διαχειρηση του χρηματος για πάντα.

Στην πραγματικότητα λειτουργούσαν ΠΑΡΑΝΟΜΑ σε αμερικανικό έδαφος από την ίδρυσή τους το 1913, όταν ο Wilson ψήφισε το νόμο αφού γράφτηκε κρυφά στο νησί Jekyll, μαζί με την IRS, το τμήμα επιβολής της Fed.

ΚΑΙ ΤΑ ΔΥΟ ΠΡΕΠΕΙ ΝΑ ΟΛΟΚΛΗΡΩΘΟΥΝ εάν η Αμερικη θέλει να επιστρεψει στην κανονκοτητα....

 Αν θυμάστε, η Ομοσπονδιακή Τράπεζα των ΗΠΑ ενοποιήθηκε υπό τον έλεγχο του Υπουργείου Οικονομικών των ΗΠΑ λίγο πριν την αποχώρηση του Τραμπ το 2020.

SINOMOSIOLOGOS

https://sinomosiologos.blogspot.com/2024/11/federal-reserve.html.

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TRUMP JUST DESTROYED JOHN DEERE!

2 MINUTES AGO: TRUMP JUST DESTROYED JOHN DEERE!

source:

The Old Farmer

11.2K subscribers

1,060,264 views 5 Nov 2024 #Trump #GlobalMarket #AgricultureMachinery

In this video, we discuss the shocking impact of recent decisions by Donald Trump that have left John Deere reeling. From trade policies to economic shifts affecting the agriculture industry, we dive into how these changes have disrupted one of the world’s leading machinery manufacturers. Discover the factors at play and what this means for John Deere's future in the global market. Don’t miss this intense look at how Trump’s actions are reshaping the agriculture equipment industry!

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Is There Hope For The US?

October 13, 2024

Authored by Jeff Thomas via InternationalMan.com

For the entire lives of anyone under the age of seventy-five, the US has been at the top of the heap in almost every way. For decades, it had greater freedom, greater prosperity and higher production than any other country in the world.

America was a cornucopia – the centre for innovation and trends in technology, the arts and social development. And today, many Americans, even if they complain about changes for the worse in their country, come back quickly to say, “This is still the greatest country in the world.” Or, “Everybody is still trying to come here.”

Well, truth be told, neither of these knee-jerk comments is accurate any longer. But even those who have come to that realisation tend to resort to the inevitable fall-back comment: “Well, whattaya gonna do? It’s just as bad everyplace else.”

And yet, this is also inaccurate. Throughout the history of the world, whenever a country had entered its decline stage, others were in the process of rising up.

And this is just as true today. There are countries where prosperity and production are far greater than in the US and, increasingly, countries where the key ingredient that made America great – Liberty – is present to a far greater degree.

In fact, this is the one characteristic of America that’s most rapidly in decline. This was especially true in 2020, when a virus was used as a justification to dramatically increase governmental dominance of the populace.

It matters little whether the US had a hand in creating the virus, or whether it was merely co-opted as an opportunity to expand control.

The result has been heavy-handed governmental meddling in medicine, business and personal freedoms.

As regards the latter concern, the odd halfway measure of personal movement control is not great enough to keep a virus from spreading, but it has been sufficient to collapse businesses, create record unemployment and make it impossible for some people to feed themselves.

In the bargain, it has served as an ideal cover story for an economic collapse that had been inevitable. The government can say, “Don’t blame us for the collapse; it was those naughty Chinese and their pesky virus that did it.”

The decline is not an accident. It’s a planned demolition. And it’s going well. For those who actually pull the strings, profit will be made from the crisis. Not for everyone, of course, but most certainly for those few who are creating it.

But many say that the US is waking up, that its citizenry are coming to the conclusion that the Deep State – that corporatist ruling class that are made up of governmental and big-business leaders – has increasingly destroyed the prosperity, production and liberty that once existed and replaced them with massive debt, an exit of production to other countries and a vanishing middle class.

And they’d be entirely correct. The endgame for the once-great US Empire is now underway, and over the next few years, we shall bear witness as it tumbles downhill.

So, what are Americans to do?

Well, my belief is that – as is always the case when a country declines – the populace will divide into several groups.

The first group, which will be by far the largest, will increasingly grumble, but ultimately do little or nothing to save themselves.

They will go down with the ship.

The second group will say, “We don’t have to accept this.”

They’re the preppers, the ones who have a store of food and have been stashing away guns and ammunition. They’re the folks who are seen at the corner bar, saying, “If they come for me, I’m locked and loaded.”

Their friends nod in agreement, but in fact, if a trained and outfitted SWAT team were to arrive on their porch, there would be very few who would succeed in getting off a single shot, and for those who did, their remaining life would be brief.

On the more thoughtful side of this group would be the third group. They would also say, “We don’t have to accept this,” but their choice of a solution will be to “work within the system.”

This is a much larger group – the ones who wait for each election as though it holds a solution. Each time, they’re disappointed. If the party they supported is elected, the winners somehow fail to return the country to the free society it had once been. If the other party is elected, the decline only accelerates.

Incredibly, the lightbulb never seems to go on for this group. They never get to the point of realisation that, “Oh, I get it: neither party has any intention of returning the country to a state of liberty. The only question is which group of pretenders gets to be in charge of the decline this time around. Either way, I lose.”

It could be said that this is the most tragic group. They’re sincere and dedicated. They endlessly hope that a solution is just around the corner, without there being any actual substance for their hope.

The commonality in all three of these groups is that they all end up as casualties. They may differ in their approach to the decline, but they’ll share in the loss of their wealth (however large or small) and their liberty.

But there’s also a fourth group – those who leave. Their numbers are small and they tend not to make a large impact on the consciousness of the other three. In fact, they’re never even mentioned by the media. It’s as though they don’t exist.

So, let’s step back a few centuries. America was founded by a hardworking assortment of settlers who came from several countries in Europe. In their home countries they witnessed oppression – limitations to both their liberty and their ability to create a good life for themselves and their families.

They were independent-minded and self-reliant. They carved out lives in the wilderness and later built towns, then cities. But all the while, they hung on to their core belief of independence and liberty.

Today, they’re still revered as being the backbone of what made America great. And this view is accurate. Yet, today’s Americans are nothing like them. None of the three groups above thinks like them, although the middle group would like to believe they do, merely by owning guns. They’re not independent-minded. They’re not self-reliant.

The key here is that the founders of America recognised that there was no chance that they could change the corrupt and controlling systems they were born into in Europe.

So they left Europe and started over elsewhere.

The fourth group are following a similar path: Seek out a destination where the government does not yet have the power to rob you of your wealth and freedoms.

The choice is a simple one. If you value your liberty – the ability to make your own decisions and to keep more of what you’ve earned – pack your bags and go.

*  *  *

Unfortunately most people have no idea what really happens when a government goes out of control, let alone how to prepare… The coming economic and political crisis is going to be much worse, much longer, and very different than what we’ve seen in the past. That’s exactly why New York Times best-selling author Doug Casey and his team just released an urgent video. Click here to watch it now.

source:

https://activistpost.com/2024/10/is-there-hope-for-the-us.html.

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