Home Prices: From American Dream to American Nightmare
24th October 2023
Home ownership was supposed to be the American dream, the thing to which the entire middle class could not only aspire but also achieve. That dream has turned into a nightmare, thanks in large part to the Biden administration and the big spenders in Congress. Now home ownership is increasingly out of reach for Americans.
The Federal Reserve Bank of Atlanta began maintaining a Home Ownership Affordability Monitor Index in 2006 because homes were so unaffordable at that time. The latest reading from that index, which has plunged 36% since President Joe Biden took office, is the lowest in its history and indicates record unaffordability. It now takes 44% of median income—before taxes—to afford a median-price home.
It’s even worse in several major metropolitan areas across the country. The cost of a median-price home is 50% of median income in Boston, 55% in Miami, 63% in New York, 84% in San Francisco, and 85% in Los Angeles. But these are percentages of before-tax income, which means the cost of home ownership in some of those places exceeds 100% of net income. “No joke,” as Biden would say.