“America’s Housing Affordability Crisis Spreads to the Heartland” (Bloomberg) says that Americans with ordinary jobs can’t afford to buy houses or apartments all across the U.S.
“Financial Crisis Yields a Generation of Renters” (WSJ) notes that the median age of a home buyer is 46, the oldest ever recorded and homeownership rates for younger Americans “have fallen sharply.” The article notes “Home prices have outpaced wage gains.” Costs are up by 21 percent (after adjusting for the inflation that the government tells us does not exist) while income is up only 2 percent (2000-2017).
I talked with a guy recently who is involved in a $1.5 billion project to create 2,700 “affordable” apartments here in the Charlestown section of Boston (story). That’s $555,555 per apartment (less than 1,000 square feet on average) on land provided for free (city already has a housing project on the same footprint). Presumably these will be higher quality than whatever was built in Halifax in 1918.
[Note: poor people who are selected by the housing ministry to move into one of these apartments would actually be rich almost anywhere else in the world if they could only get their hands on the $555,555 capital cost as a direct grant instead of as an in-kind service! If they could also get their hands on the monthly operating cost and combine that with interest on the $555,555 they would be able to enjoy, without working, a middle class or better lifestyle in many of the world’s beach destinations.
How about folks who work at the median wage? That’s about $23/hour in Massachusetts (BLS) or $46,000 per year. NerdWallet says that someone earning this much in MA can afford a $258,500 house if he or she has saved $60,000 for a down payment, has a top credit score, and spends $0/month on food and other non-housing expenses. Zillow says $274,416 on a nationwide basis. So a dual-income couple in which both partners earn the median wage wouldn’t be able to afford one of these units without a taxpayer subsidy, even if landed were free and the unit were sold at zero-profit construction cost. The U.S. has apparently become a society in which Americans can’t afford to live like Americans!
But the caravans of folks streaming over the southern border and claiming asylum will surely be able to do better?