BY KATHLEEN J. ANDERSON | The Political Insider
The American Dream is something all Americans instinctively strive for. The path to your American Dream generally involves going through some schooling, finding a career, building a family, and saving up for a comfortable retirement, all while living in a house where you raise your children.
Unfortunately, most middle class families in America can’t afford most of the houses on the market, forcing them to put a pin in their American Dream or give up on it altogether. Is this housing dilemma a problem, or are things better than they’ve ever been, as Uncle Joe likes to make us believe?
The answer to that question is obvious, no matter how much the left tries to lie to you, your pocketbooks always tell you the brutal truth. Times are tight, and the American Dream is becoming less obtainable for those working the hardest in this country.
Home Sweet Home
According to the National Association of Realtors, over 75% of houses on the market are too expensive for middle class buyers. To break it down more specifically, of the 1.1 million homes on the market for April 2023, middle-income families could only afford about 23%.
Compare those numbers to five years ago when the middle class could afford 50% of all houses on the market. The Mortgage Bankers Association says that housing prices in the United States have never been as unaffordable as they are now.
So what is causing this housing deficit for the middle class? Like most things dealing with money, it’s a few complicated factors.
First, there is a housing shortage. The market is missing roughly 320,000 houses priced at or below $256,000.
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That price is the ideal housing cost for those who earn up to $75,000 annually, or what is considered middle-income families.
Economic strategist Mitch Roschelle explains:
“Before the financial crisis, we had 14 months supply of homes, that’s over a year’s worth of homes. Now we have less than a three months supply.”
If there aren’t houses to buy, there isn’t much hope to clinch that ever more elusive American Dream.
The rate game
The second factor in the decline in affordable houses for the middle class is the interest rate increases. The average 30-year fixed mortgage rate surpassed 7% in May, reaching a two-decade high.
These mortgage rates are only expected to pull back to 6% by the end of the year. According to the Case-Shiller U.S. National Home Price Index, as of Q1 2023 there was an annual appreciation of 7.9%.
Compare that to the Bureau of Labor Statistics wage growth numbers that hovered at 3.2%, and we have quite the inconvenient imbalance. Wage growth’s inability to keep up with the increase in housing rates has caused an affordability gap for the middle class that Joe Biden claims to care about.
