The Affordability Crisis Is Shaping Up as a Key Issue in the Election — and Trump Has the Advantage Not enough has been written about this from a political standpoint. Only it sure should come up in the debate next week.Lawrence Kudlow
It’s a kitchen table election. Heading toward the CNN Presidential Debate next Thursday, one would think President Trump would be pulling together a scathing critique of President Biden’s performance regarding that old political cliché, kitchen-table issues, which surfaced again in the form of today’s affordability crisis for working folks.
Things like inflation, groceries, gas prices, et cetera — and I’ll get to those. Yet there’s an underrated issue which is looming larger and larger. And that is unaffordable housing.
Existing home sales for May came in just more than 4 million units — which is the lowest in 30 years. During the Trump years, home sales were running around 6 million.
Meanwhile, average home prices came in at $419,300, and that is a record high going all the way back to the recorded data beginning in 1999.
Pre-pandemic, during Trump’s term, home prices were running $270,000-plus.
And one of the keys to the unaffordable housing affordability crisis is the mortgage rate that has been running pretty consistently around 7 percent during the Biden years compared to below 4 percent during the Trump years.
Yes, it’s quite true that all these zoning-related regulatory burdens imposed by blue-state Democrats have limited the available supply of homes.
And it’s also true that a lot of those same blue-state Democrats want to incorporate the suburbs into the cities in order to build public housing and force crazy climate change regulations. Anything to stop gas-powered autos and basically destroy the value of your home.
Yet even in the healthier red states, sky-rocketing mortgage rates and home prices have made it very difficult, if not impossible, for working folks of any color or stripe to afford to buy a home — and in particular that includes younger folks.
Not enough has been written about this from a political standpoint. Only it sure should come up in the CNN Presidential Debate next week.
And, remember, high inflation and borrowing rates have squelched middle and lower income purchasing power. It’s a familiar litany but worth repeating: the level of consumer prices has jumped 20 percent under Mr. Biden.
Grocery prices have jumped 21 percent. Gasoline 45 percent. Electricity 28 percent. New and used cars and trucks about 20 percent. And on and on.
Weekly wages for the typical family have not kept up with prices, with a net-drop of more than 2 percent over three and a half years.
In other words, laborers have not had a pay raise, they’ve had a pay cut. And if you throw taxes in, their take-home pay has dropped even more.
And, back to the kitchen table, where in so many families it is the woman of the house who handles the checkbook and the credit-card balances.
Whoops.
Besides a 7 percent-plus mortgage rate, factor in a roughly 10 percent auto loan rate, with huge insurance costs, plus up to 25 percent or 30 percent credit-card rates.
None of these borrowing costs are baked into the consumer price index, but they are baked into the kitchen table affordability crisis.
You can’t take GDP to the store.
Yet take-home pay, mortgage rates, and a generally discouraged middle class suffering from an ongoing affordability crisis is going to be front and center at the CNN Presidential Debate next week.
From Mr. Kudlow’s broadcast on Fox Business Network.
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