Staff Reports
The current state of the American housing market serves as a glaring indicator of the broader economic disaster caused by misguided governmental policies. The aftermath of the extravagantly reckless spending spree under the Biden administration and his Democrat allies has hit hard, with the effects of this fiscal insanity becoming increasingly apparent. The massive stimulus measures intended to “rescue” the economy from the COVID-19 lockdowns have now turned into a nightmare for everyday Americans trying to find a home.
In 2021 and 2022, Democrats pushed through massive spending increases with no input from Republicans, believing that a continual flow of taxpayer cash would somehow prop up an economy that had already begun its recovery. As a direct consequence, the Federal Reserve was forced into a corner, having to sharply increase interest rates to combat the inflation that ensued from this unchecked spending. Mortgages that were once comfortably low at around 3 percent are now hovering near 7 percent. This dramatic increase has sunk new home sales to levels unseen since the housing crisis of the late 2000s, with sales dropping precipitously month after month.
We're fcked. It's that simple.https://t.co/oMum7JFOD9
— AppPatriotgirl 🇺🇸 (@jsmith4966) August 5, 2024
In a clear reflection of this downward spiral, the sales of new homes plummeted by nearly 15 percent in a single month, signaling to all but the most oblivious that the housing market is in deep trouble. Such numbers haven’t just dipped—they have cratered. With year-over-year sales down and records being set for lows in home sales, the ramifications of the Democrats’ financial folly are becoming startlingly clear to Americans.
As high interest rates persist, many homeowners who secured low mortgage rates before the Fed’s rate hikes are choosing to stay put, creating a scarcity of homes for sale. This self-inflicted housing inventory crisis is pushing home prices through the roof, with the median price for existing homes skyrocketing to a staggering $426,900—an increase of over 4 percent from last year. This situation has effectively shut out many potential buyers from the market, causing bidding wars for the few desirable properties available. Wealthy buyers are taking the lion’s share of any homes that do hit the market, proving that Democrats’ economic policies are shooting middle-class Americans out of the running completely.
In a desperate attempt to adapt to the shifting market, home builders are now redesigning new homes to be smaller—an ironic twist that distills the crisis into a clear message: fewer amenities at a premium price. The notion that builders are eliminating hallways to save costs while still increasing prices per square foot sounds like a punchline to a bad joke, but for many Americans struggling to find affordable housing, it’s anything but funny.
All of these troubling trends in the housing market encapsulate what economists have termed stagflation: rising prices and shrinking availability. The same principles are playing out across essential sectors of the economy, from groceries to fuel and beyond, further stressing already tight budgets for average families. The stark reality is that the government’s lavish spending and regulation have wreaked havoc on those trying to make ends meet, leaving them to ponder how the same leadership that promised them a brighter future has instead gifted them with inflated bills and scant options. The housing crisis is just one manifestation of a broader economic sickness that continues to fester under current policies.
