A US homebuyer now needs to earn $114k to afford the median priced home for sale. The problem: that’s 35% more than the median household income…
The monthly mortgage payment needed to buy the median-priced home in the US has increased 80% over the last 4 years, moving from $1,500 per month to $2,700.
The increased cost of single family homes is driven by supply and demand. There has been a relative undersupply of houses. In addition, large corporations are buying up homes, driving up demand, and renting them.
Fortunately, we are beginning to see large subdivisions being built all over. That had not been happening very much during recent years.
Homes need to be affordable for the average American. I think the individual states ought to prohibit corporate entities from buying and renting single family homes and duplexes. The question is whether the legislators who receive donations from these corporate entities will do this.
TC: I don’t know if it would be a good idea for government to meddle in the housing market or not. Maybe the invisible hand might solve this enigma.
Fred, my rationale is as follows. Home ownership is a key component of the dignity and aspirations that people have for a secure and successful life. It is one of the key embodiments of the American dream. Being transformed to a nation of renters falls far short of what we want for our people.
There is an element of subjugation with corporate ownership of single homes. We don’t want our people to be subjugated. But it is also a reflection of corporations wanting to invest in real assets, perceiving that the stock and bond markets will not be as rewarding in the future as they have been during the last 40 years.
It was really never intended that single homes were going to be the province of corporations; and corporations have never really been a significant part of that market until recently.
Given the relative scarcity of land in proximity to jobs, and the reality of zoning restrictions, I think people are going to be increasingly boxed out of home ownership if corporations continue to buy up homes. That would be a real tragedy.
This is a growing problem for sure and I agree for the future home ownership to continue something needs to be done now. I would suggest, to stop the home and land grab by foreign entities, large corporations as investment portfolios and non citizens. This alone would have a big impact on the current problem.
Hi, Tammy! I agree with you– those are some very good ideas. Adding non-citizens and foreign entities to the mix of those prohibited from buying houses is definitely warranted.