Guest Post by Anthony Sanders
America’s middle class is having a difficult time. They are not sharing equally in the Fed-induced stock market surge and real median household income is the lowest since 1995.
Rising home prices (albeit slowing), stagnant wage growth and rising mortgage rates are leading to a decline in home affordability.
Take the National Association of Realtors Homebuyer Affordability Index. You can see that UNaffordability peaked in 2006 when home prices peaked and real median household income was recovering from the 2001 recession.
You can also see that AFFORDABILITY peaked in 2012 after home price declined and mortgage rates hit a low since 2000. Unfortunately, real median household income had also fallen preventing a true housing recovery.
Mortgage purchase applications remain at a 14 year low (like real median household income, mortgage purchase applications are back to 1995 levels). This results in an affordability gap due to rising home prices, rising mortgage rates and declining/stagnant income.
Unless members of the American Middle Class over substantial holdings of the S&P 500 and/or Commercial Real Estate, there massive Federal Reserve asset purchases and interest rate repression scheme has NOT helped the Middle Class.
Is loosening credit standards the answer? Do you think Federal housing policy should heap MORE debt on households that are already suffering from the aftermath of a housing/credit bubble that burst? I would say no.
The solution is not more debt, it is adopting policies that allow that economy and wages to grow. Not stifle recovery.
So, like in the movie “The Incredible Burt Wonderstone,” we have succeeded in making the Middle Class disappear!
Sometimes the reader’s comments are better than the original article. I save the better ones. Here’s a little gem:
“The Healthcare system is broken; The Financial system is broken; The Representative government system is broken; The Educational system is broken; The Retirement system is broken; The Judicial system is broken; – I know I’ve left some System out that’s broken, but you get the picture. America is Broken.”
And if falling wages isn’t enough, check this out:
http://theeconomiccollapseblog.com/archives/scam-alert-hospitals-all-over-america-are-wildly-inflating-medical-bills
A personal example of medical scams. My wife and I have Blue Cross/Blue Shield. I get a routine blood test. The lab charges $96 for this test – but because I’m a BCBS member – the test is only $18. Here’s the scam: BCBS looks good cause they cut the cost of the test by 80%, at the same time the lab gets to ass rape people who don’t have insurance. If they’re making money at $18 – it probably costs them $9 – a fucking scam.
Broken…hell no…wages have risen for the first time…at least that’s what I read in the financial section of the paper Sunday and the MSM would never lie to me .
There is no inflation…Janet said so….I notice that stuff has gone up and that some goods are still the same price even though the package has less goods in it but hey that’s merchandising isn’t it ?
Sarcasm meter is now turned off .
Look at your 1/2 gallon of Orange Juice – you’ll find it’s 56 or 58 ounces.
Dutchman…you’re right about the over-inflation of medical bills. The hospital sent a bill to my insurance company each week for the cost of my radiation oncologist….$798.00 . The price that they paid via a negotiated agreement was $158.00…a hell of a difference .
32 oz Gatorade is now 28 oz for the same price. Just noticed this last night. Box of 5.56.ammo used to come in 500 rd boxes now it’s 420 r ds for the same price. Noticed this Saturday.