Guest Post by Martin Armstrong
Are you too poor for the basic human necessity of shelter in Biden’s America? The average home price in Q4 of 2022 was $535,800, according to the St. Louis Fed. If you live in a highly desirable area, expect to pay more. To simplify the math, let’s say that you are looking to purchase a $500,000 property. To heighten the fantasy, let us also pretend you are one of the rare Americans with zero monthly debt. This means that you do not have student loans, car payments, childcare expenses, medical bills, credit card debt, or any major outstanding bill. Fewer than 25% of American households are debt free and this number is rapidly dwindling.
Ok, so you decide to put 5% down on the house or $25,000 for a loan of $475,000. You manage to lock in a 6.7% interest rate for a 30-year mortgage under a conventional loan. Nationwide averages in real estate drastically undercut true averages due to the outliers, but the average annual property tax in America is around $3,000. I personally have not seen a property tax this low between FL or NJ, but I’ll attempt some optimism. After all, this should be a simple price breakdown that does not lead to a mental one.
We will average the PMI payment of 0.5% at $197.92 for 125 months. We will also incorporate the low home insurance average estimate of $1,000 annually. To be most forgiving in my calculations, I will also assume that your monthly HOA fee is $0. This is utterly impossible for anyone seeking to purchase a condo. In my area, the average HOA fee is $600 per month, and a $500,000 property will not afford you a single-family house. At best, you’d be lucky to find a two-bedroom property at that price point in my area. In contrast, home prices here were about 40% to 60% lower in 2019.
Therefore, the overall total monthly payment for a $500K home is $3,596.32. This home can be yours by 2053 if you close this year. Forget “starter homes” as once you are locked into a good rate, you will likely not leave. So how much income do you need to afford this monthly payment? The MAXIMUM debt that the bank will allow you to qualify for is around 50% of your total gross income if you have good credit. If you choose this method, you will be “house poor” and unable to afford other basic human needs. So based on these calculations, you would need to make at least $7,192.64 GROSS per month to afford this property and live “house poor.” This would equate to a salary of $86,311.68 per year BEFORE TAXES.
I did not factor in closing costs, inspections, maintenance, moving, or even furniture. So should you continue renting while establishing zero equity? The median rental price in America as of February 2023 was $1,978. Inventory is low, and landlords are compensating for the money lost during COVID moratoriums. Most leasing offices require tenants to earn 3X the monthly rental price, equating to a monthly gross income of $5,934. This has left countless Americans stuck on the rental carousel of paying the majority of their monthly income to the landlord and being unable to save for a future that includes home ownership. Landlords can raise rental costs yearly at whim, and there is no guarantee that you will comfortably be situated in your rental unit from one contract to the next. Rental properties have also begun charging fees for everything under the sun, such as repairs and parking, which was one of the reasons people chose this method.
Gone are the days when Americans comfortably paid ¼ of their monthly salary toward living expenses. We have not even touched on the astronomically cost of other basic living necessities such as food or energy. You must make a decent income if you want to buy a home in 2023. The bank does not care if you are unable to pay because they will simply take your house. Some are lucky enough to secure an interest-free loan from the central bank of mom and dad. Others, the majority of the Great Unwashed, are scraping by—YOU WILL OWN NOTHING AND BE HAPPY!
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WTF Happened In 1971
Nixon told DeGaul to take a hike, as the bricks in Fort Knox that accumulated after WWII were starting to be depleted, by the likes of many holders of U.S. debt in the form of fiat promissory notes.
Tricky Dick pulled down the shade. Closed the window of real money redemption.
Thus the FRN’s became unshackled from any form of link to sound money principles as advocated by Mises, and a scant few others.
Then the soft, quiet hum of the printing presses started to ramp up.
And the line deviations in the graphs B_MC posted above began to emerge.
Bah! scream the naysayers of rare metallic coin, citing scrip as still the current means to conduct financial transactions, build paper savings accounts, and create investments that sometimes see acceptable ROI, but sometimes that line goes south.
Manipulations also began to emerge, distorting markets.
And they continue to this day. Initiated by greedy, evil men. And women, too.
Like the short haired dickless former chair of the Fed, having recently been granted authority to visit a comedic leader of a European country of blue & yellow, to grant him pallets of cash, in the Nazi quest to take down a rare leader and country who espouses traditional values and a culture worth studying for it’s contributions, warts and all. War is profitable for some.
For others, many, many others, it only brings death and destruction.
Sure, 7-Eleven would have a hard time issuing change for our loaves of bread, should we try to use a pre-’65 circular form of money for payment.
“Can’t eat your gold or silver, when the stomach churns” some keep saying.
But so too, those green, white, & black sheets of paper would make a bland salad, offering zero nutrition for hungry souls.
So, what’s the takeaway? Simply reflect on this.
The hundy is the new twenty.
Does your C-note’s purchasing power reflect strength, since 1971?
How much does it buy, in 2023? It’s not hard to understand, really.
An argument could be made, that the declination really began in 1913.
Under cover of darkness, in the waning days of December, when most of the
gang in the halls of legislative power had already left office, to head home and be with family, and enjoy Christmas dinners, with abundant food, and gifts for all.
Do the research, and realize who was behind such efforts prior to WWI.
Another stain on humanity’s follies. Like all wars.
For more recent enlightenment on the cause of today’s effects,
hereby suggest reading an update version of The Creature from Jekyll Island.
Pure gold, as a revelation. Parallel intended.
https://www.realtor.com/realestateandhomes-search/Philadelphia_PA/sby-1
Cheap real estate here!!!!!!!!
Are you suggesting the 30 Blocks of Squalor has been cleaned up
recently, so to goose the market attractiveness there?
Hmmm.
Trade Whitmer, Stabmenow, and Gary’s Peter for the PA Governor and Senate lump straight out of Young Frankenstein, soon to be supplanted by his wife Morticia?
Yeah, no. Pass.
But it was humorous. I’ll admit that.
Trend extrapolation from South Africa and East Palestine:
NWO-lite declares Philadelphia the official SmartCity®℠ for Pennsylvania and force marches the Amish into its squalor and decaying buildings.
Blackrock ensures MSM those former farm communities will be well managed by “Green certified”, Dutch NGOs.
The ghetto then rapes, mugs, murders, and eats the resettled “white colonialists” as “due reparations” according to neo-Trotskyite educators. Dirty Amish bonnets become fashionable wear for the native thuggery.
Try this:
“Hence, the name, Gog, spelled with two gimels, literally means “doubly lifted up in pride.” The middle letter is the vav, which literally means a nail or peg. It also serves as the word “and,” because it is a conjunction. A conjunction joins (or nails) two things together. So literally, Gog could be literally rendered “pride and (more) pride.”
https://godskingdom.org/studies/books/the-struggle-for-the-birthright/chapter-15-gogs-invasion
Watergate was a government op to get rid of Nixon. It is hard to have sympathy seeing how he destroyed the country.
Watergate=50 year old squirrel.
“Watergate was a repairman looking for a fuse box!”
~F. Gump
China. Can’t compete (for awhile ) with slaves.
It’s not that homes are so expensive….
It’s that the Dollar has lost so much value….
Slightly off topic. From what I’ve seen, good rural properties, in red states, will still be very popular no matter the price, economy or interest rates. I believe this trend will accelerate as more and more people will pay anything to get out of the liberal run hell holes.
Nonsense from this hack.
You can play around with numbers all day to create a straw man, but if you really want a house in the USA you have 50 states to pick from, not all of which have such a high barrier to entry cost.
Martin Armstrong is no “hack”.
He’s using nationwide averages.
Why don’t you give us a state-by-state breakdown if your panties are in a wad over this.
When your most notable accomplishment is being an ex felon, I would say getting called a “hack” is charity.
For one quick example, according to Zillow:
(The average Missouri home value is $220,605, up 9.0% over the past year)
The author doesn’t specify timelines nor does he give sources for his data. Is he talking average over all time, the last year, when exactly? And am I, the incredulous reader supposed to trust this guy at face value? Especially when he has a documented history of ripping people off that led to his imprisonment?
So, there is that too. A year ago the average house in Missouri would have been $200,750.
I stand by my assertion that there are 50 different varying choices of affordability for a prospective home buyer. You can’t wave a wand of generality around and make an accurate, effective argument that “most” people cannot afford a home.
What does “most” mean? Again, not defined. 51%? 75%? 90%?
I hadn’t noticed, but I’ll un-wad my panties when you douche the sand out your vagina.
Yep.
Fear porn article the average home price is $535,800 aaaagh!
What is the lowest home price?
What is the highest?
You can buy homes for $40,000 in countless cities and towns back east.
Some neighborhoods you can’t find a home for less than $10,000,000.
Other neighborhoods they don’t sell at any price. (Here’s looking at you Detroit)
I have seen decent homes with up to 40 acres for under 400k, last year.
PEDOPHILE bill gates says……………”Let them eat corn syrup” !
They can all live in the beautiful “Freedom Cities”, like dogs in a kennel.
Deflation is the reason I root for depop via jab.
Traffic is the reason I root for depop via jab.
Deflation is the reason I root for depop via jab.
They want us all in eastern European tiny apartments owning nothing and being happy.
There are no them, only us.
Pretty sure most people will join up and work with the “enemy” for a steak dinner.
Just like in They Live, and The Matrix.
My household has zero debt. We planned my early retirement next year. We picked a location, visit several times a year, even picked and attend a church while there.
Between 2020 & present prices on land and homes have tripled! While inflation is part of the problem the main driver is remote workers fleeing the city. We have decided as much as we love the area and friends we made there we are not going to bury ourselves in debt for retirement.
We have begun to explore other areas and use 3x to 3.5x income to determine what is affordable.
Fucking Awesome!!!!!!!
I generally like Martin Armstrong’s analysis, but $3000 property tax and $1000 homeowner insurance on a half-million dollar property is some kind of pipedream, based on my personal experience here in flyover country.
Yep. And I had to laugh when he used a bunch of assumptions, then calculated the monthly payment to the penny….
$1000 for homeowners insurance? The annual premium for even my humble abode is north of $2000, and this ain’t a coastal blue state either.
I recall as a child my father taking home about $125 weekly (1959) as an engineer for Kaiser Jeep. My parents’ monthly mortgage payment was around $85. Groceries for our family of 4 was anywhere between $20-$25 weekly and heard my parents bitch about that all the time. You paid cash for a Dr.’s visit, no health insurance involved. Now it takes both parents working 40+ hours per week with both combined incomes in single week to make a single mortgage payment.
Now it takes both parents working 40+ hours per week with both combined incomes in single week to make a single mortgage payment.
It does if stupid people take on a debt load which makes their life difficult.
I bet people in financial trouble are all super happy about their student loans….stupid suckers!
College seems a repository for the financially retarded.
_________
Compare:
College grad=heavy student loan burden keeps him living in moms basement.
Trade Tech grad= Owns his own home debt free by 35.
_________
Recognized the cognizant dissonance scam at age seven when reading about the Soviet emergency grain loans from TeamuSA in 1972.
The sheen of TeamuSA, dulled significantly.
Yay! The Soviets are an existential threat to team uSA. Wait, they are struggling, better help em back up or we won’t have an enemy to fear monger about.
Yep. History.
This is the programming that was put in place, to trap people into assuming large amounts of debt. When in debt, you are controlled, its that simple. The messaging was go to college, get that degree or diploma and make big money. The jobs for degrees and diploma’s are where??? In the cities. Pull people into cities, easy money, big debts, driving prices higher and further indebting the people going there. Buy more stuff, get bigger and better things than your parents ever could, more easy debt.
Then when the planned emergencies happen you’ve locked people into the fear and control responses, compliance. I can’t rebel, I have to take the shit shot or lose everything. How often was this refrain lamented, even here on TBP?
Weird how this all seems to be playing out, like some kind of plan to further enslave people. What should be avoided was turned into bait to enslave. What should have been a reasonable choice was promoted as backward, hickish and lowly. Get a trade, it’l serve you better and longer than some paper that says you memorized all the stuff we told you. If fact you can get several trades if the first one turns out you don’t like it so much. Its easy, and affordable.
Usable skills never run out of fashion. and hold their value.
.
My . is lonely.
Can he play with your . ?
I wrote something cheerful and uplifting above, then realized “Mein Gott, what am I doing?”
Gott im Himmel!
That was close! Good thing you caught yourself!