Homeownership has long been a critical component of the American Dream. But under Bidenomics, owning a home is beyond the reach of many Americans due to the rising cost of owning and maintaining a home, according to the latest report by The Wall Street Journal.
Buying a home is more than having a roof over one’s head. Homeownership is the primary driver that has helped generations of Americans build wealth. A home is an appreciable asset, and its value usually increases substantially over a long period of time. Naturally, the primary residence represents the most significant asset among American households. According to the Census Bureau, homeowners’ median net worth is 80 times larger than renters’ median net worth.
However, owning a home has become very expensive under President Joe Biden. His excessive spending caused record-high inflation. The Federal Reserve had to hike interest rates dramatically between 2022 and 2023, seeking to bring inflation rates down. Consequently, mortgage interest rates spiked from around 3 percent in 2020 to over 7 percent.
Every percentage point increase in the mortgage rate means buyers must pay hundreds and thousands more for the same home or get less home for their money. According to Bankrate.com, the rising mortgage rates mean that as of July 2023, “homebuyers on a $3,000 monthly mortgage payment budget have lost $30,000 in purchasing power since February 2023 alone. In other words, they can afford to purchase a $450,000 home in July, compared to one priced at $480,000 five months ago and at $510,000 one a year ago.”
The Wall Street Journal finds that “homeownership affordability fell to its lowest level since the 1980s as mortgage rates reached a 23-year high and home prices set new records.” Consequently, more and more Americans have given up saving for a house down payment and been forced to miss out on the lifestyle they had hoped for. A Bankrate.com survey revealed that 1 in 4 Americans said the lack of housing affordability and having to rent (rather than own) makes them feel financially insecure.
Many Increased Costs
Unfortunately, the rising mortgage rate is not the only hurdle for homeownership. Many American homeowners who were able to lock in lower mortgage rates before Biden came into office are struggling to keep their homes because other costs associated with homeownership, such as property taxes, homeowner’s insurance, and maintenance and repairs, have spiked too. The Wall Street Journal reports that “property taxes, which are rising due to the effect of inflation on local government budgets, are also pushing homeowners to dig deeper into their bank accounts. … In Charlotte, N.C., the average property tax rose 31.5% from 2022 to 2023. In Indianapolis, it was up nearly 19%.”
Insurance companies cited record-high inflation as one of the reasons for soaring homeowner insurance premiums. The Journal finds that “the average annual home insurance cost rose about 20% between 2021 and 2023 to $2,377,” and nearly “10 percent of homeowners were worried that they couldn’t afford their home insurance premiums at their next renewal.” In my home state of Colorado, the average homeowner premium was up nearly 52 percent between January 2019 and October 2022. Some homeowners in Louisville, Colorado, saw their insurance premiums skyrocketed 700 percent.
In addition, the regular upkeep cost of a home, including gutter cleaning and lawn care, costs on average about $6,700 a year, representing an increase of more than 8 percent from a year earlier. About 20 percent of homeowners declared that “they couldn’t afford a $500 emergency repair without going into credit-card debt.”
A combination of higher property taxes and rising home insurance and maintenance costs has forced some homeowners to sell because they simply couldn’t afford it anymore.
Outlook
Aspiring and existing homeowners won’t see any financial relief soon since the most recent inflation report shows that the inflation rate in March rose by 3.5 percent. The stubbornly high inflation suggests that the Federal Reserve will not cut interest rates soon. If Biden wins his reelection or another Democrat becomes the president of the United States, the declining homeownership in America will likely continue.
Economically, the Democrats’ economic policies can be summarized as one word, “spending,” even though excessive spending is the root cause of high inflation. High inflation means higher interest rates are here to stay. Ideologically, a society with fewer or even no property owners is what the left aims for. The World Economic Forum bragged that if the global elites succeed in their Agenda 2030, “You will own nothing and be happy.”
American voters must wise up. Fewer Americans owning homes means fewer will be able to realize their American dreams and build long-lasting wealth; more people will have to depend on government handouts to survive. President Calvin Coolidge reminded us, “Ultimately, property and personal rights are the same thing.” The policies that destroy property ownership will also take away individual freedom. Owning nothing will only make you miserable and unfree. If you want to pursue happiness, own as much as you can and vote those anti-property-rights politicians out of office.
