While walking through a very Midwest USA mid-tier neighborhood in an outer suburb last summer, a young couple passing by with two young children told me they were admiring all the “beautiful houses.” The father was a union worker and did jobs on the side to earn more. The mother stayed with the small children. They lived in an apartment.
There are many young American families like this — doing everything right, but still, unless given money from parents for a down payment, priced out of home ownership. Home prices relative to incomes have soared since the market bottomed in 2012, especially since the 2020 Covid panic. From 2022-2023, even as home prices relative to incomes continued to climb higher, mortgage rates doubled and remain at this higher level today. Obviously, mortgage rates have been much higher in the past. But the toxic combination is the high price of homes relative to incomes, paired with these higher mortgage rates.
That’s why it’s encouraging that President Trump is moving to make homes more affordable. Last week, Trump announced he is “taking steps to ban large institutional investors from buying more single-family homes.” Trump specifically mentioned young Americans struggling with housing affordability and said the administration would launch more proposals in the next several weeks to make housing more affordable. The White House’s proposals need to be hard-hitting and not tinker around the edges of a major problem.
Hellbound and Down 