Housed and Fed

I believe we are, with a couple of factors leading my thought process. Those being home ownership rates, surplus, and policy issues. Let me explain.

First ownership rates: We are seeing a massive decline in the age of ownership, 79% of people 65 and older own a home, while 37% of people under 35 do. Well the argument is it takes time to build wealth for home purchasing. Though true, rising costs don’t give way to current wage amounts. Younger generations may never own. We must also ask, what happens when this population ages out and housing surplus grows? We already have an issue with our surplus.

Second surplus: According to all the data and the best research in the field we have a housing shortage across the nation. The shortage is in low-income and affordable housing. Back to cost. This affects area work force and individual investment. A house is the largest investment most people will make in their lives. If we have no investment from the younger generations and costs continue to rise. What will the economy do? This is amplified by current policy issues.

Third policy issues: From a federal level there is no policy. They are looking at cutting most of the housing programs. From a state level most states are trying to increase low-income housing by building more multi family homes and low income housing. The question I have here is, can we throw more money at the problem to fix it? Do we need more housing when cost is the limiting factor on homeownership. We have a trifecta: low home ownership, no surplus and an attempt to increase inventory.

If the only way a person can afford a home is by getting an FHA (Federal Housing Administration) loan or down payment assistance. Then we need to address the elephant in the room. We have large corporations and individuals with lots of money buying the housing stock as investment. Short term rentals, long term rentals, renting is not the answer.

Let’s not fret however, we will increase the inventory, still allow homes to be bought as stock, and have no policy to govern those that can afford it, but we can build more homes. No generational wealth is still no generational wealth. When it finally crashes, who will be left to pay the bill?

I’ll continue to write each blog as a question. Please feel free to give your own input, or take it as a thought provoking comment.