Guest post by Anthony Sanders
The Federal Reserve’s zero interest rate policy and quantitative easing programs are contributing to rising home prices and apartment rents while not contributing to household income gains. The result is the “new” housing affordability crisis or as The Talking Heads sang “Burning Down The House” as in burning down housing affordability.
Bloomberg: The U.S. apartment-vacancy rate rose for the first time in almost five years, a sign that supply is starting to catch up to rental demand after a boom in multifamily construction.
The vacancy rate rose to 4.2 percent in the third quarter from 4.1 percent the previous three months, the first increase since the end of 2009, Reis Inc. (REIS) said in a report. Net leasing gains of 37,233 units lagged behind the 46,055 new units completed, the New York-based real estate research firm said.
Although the rise in the apartment vacancy rate is small (in the red circle), it may be a turning point if it repeats for several months. Notice that homeownership rate continues to fall as real median household income is making feeble increases.
Then again, mortgage purchase applications remain in “Death Valley”, incomes are stagnant or rising slowly, but home prices and effective apartment rates are rising.
Is The Federal Reserve contributing to the this neo-affordability crisis with its flooding of capital markets with liquidity? It appears that the third round of quantitative easing (and The Fed;s zero interest rate policies) are associated with rapidly rising house prices and apartment rents, but NOT real median household income and mortgage purchase applications.
The is the NEW affordability crisis where cheap money benefits investors who drive up asset prices (but not family income).
Is The Fed helping “Burn Down The House?” At least, burning down affordability.
Meanwhile, Buffet is buying the largest auto dealer group in the US(?).
Admin, are you smarter than a Buffet?
Ah, don’t worry about it.
Don’t you know that WDC/O created a few billion (seems like it was $25 billion, but the spending is so ridiculous now I lose track) to gift to “property management” companies (just happen to be started by big banks, but I digress) to buy up our foreclosed homes (that the banks were made whole on) and turn them into Section 8 housing?
Then, because city councils are nothing if not money/income sniffers, many have convinced the “voters” to demand higher rental property taxes to suck out some of that glorious “free” federal cash. That it is hurting the little guy landlords is nothing but a bonus.
So, no worries. The “poor” are getting free stuff (which explains the three new families in my neighborhood), the banks are making tons of money, the city tax roles are papering over the loss of industry with the increases in fed.gov rentals, so all is well.
Too sad that it means fewer private jobs, homes, neighborhoods with people that have skin in the game.
The new world order sucks more everyday I learn more.
Intentionally destroyed. How anyone can think this stuff accidental is beyond me.
@wip — what if Buffett is picking that up in anticipation of a bailout for these flooded channels downstream? Something will need to be done to unclog the drain before the Big Three fail yet again.
WIP,
When I saw that Warren was buying car dealerships all I could think about is the mess he is intimately involved with in the Midwest. He bought railroads, they ship the shale oil taking rail space and engines away from the normal movement of grain to markets. Now he lobbies against the Keystone pipeline, insuring his profits. Fuck the farmers who are left with no place to put a huge crop.
I’ll be watching for new laws to “protect” the auto industry. This fuck has government in his pockets.
EF