On Twitter, many people who support Kamala Harris are raving about her smile, her happy words, and how she makes them feel. They don’t seem to really understand that a candidate’s appearance and talk doesn’t mean that they can get results or solve problems. One problem is expensive housing. In this post, I’ll explain how the Biden-Harris policies have caused housing prices to rise.
First, let’s see how the housing industry is going in America, with a Daily Signal article by a Heritage Foundation economist:
Home affordability just hit a 17-year low, which means the dream of homeownership remains unattainable for the average person. Amid a cost-of-living crisis, saving enough for a downpayment and then affording a monthly mortgage payment has become a Sisyphean task—and radical leftist policies are to blame.
Adding up the monthly cost of principal and interest on a mortgage, property taxes, and insurance amounts to half the average wage earner’s monthly take-home pay. That would be a stretch even in good economic times, but it is downright impossible when the prices of necessities such as food and energy have exploded over 20% and 50%, respectively, in less than four years.
When people are already borrowing on credit cards just to pay for groceries, spending half your income on housing just is not doable.
Government spending is to blame for the inflation that is crowding out people’s budgets:
Forty-year-high inflation was created by a profligate Congress and White House spending trillions of dollars that the nation did not have. In 2020, the year before the radical Left took control of the federal government, prices rose just 1.4%. Just 18 months later, prices were rising almost that fast in a single month.
And when inflation rises, interest rates have to rise, too. This isn’t going to affect people like me – I bought my new construction home for cash years ago. But young people who are buying today will have to borrow for their homes, and they’ll pay more in interest:
Just as the predictable result of government overspending was inflation, so, too, was the rise in interest rates that followed. The sheer size of the multitrillion-dollar deficits of the last several years caused prices and interest rates to jump significantly.
But there’s more. The open borders policies of the Democrat party are an independent cause of higher home prices.
Here is an article from the Washington Times, written by that same Heritage Foundation economist:
Many Americans rightly blame the current housing affordability crisis on government for overspending and manipulating interest rates, which drove up prices and made borrowing prohibitively expensive.
But few understand the role the radical left’s open-border policies have played in raising home prices.
As millions of aliens entered the United States illegally over the last 3½ years, they significantly increased housing demand. That was especially true in places where state and local governments gave handouts — in addition to federal funds — to illegal aliens for monthly housing payments.
This dynamic in the housing market has even been recognized by Neel Kashkari, president of the Federal Reserve Bank of Minneapolis. But you don’t need to be a Fed bank president to know that increasing the demand for housing will raise prices; it’s basic economics.
The same thing happened in Canada, after 9 years of Justin Trudeau. He let in MILLIONS of illegal immigrants and refugees – people who pay less in taxes than they collect in benefits. And you can bet they need somewhere to live. Unfortunately, Trudeau’s anti-business policies have killed the home construction industry. Demand went up, supply went down. Now the average price of a single-family home in Canada is up to $801,600 CAD. ($593,406.75 USD) And if that were not bad enough, the massive influx of unskilled immigrants has caused health care costs to skyrocket – up to $17, 713 CAD for a two-parent family with two children. Demand is going up, but supply is going down, as many Canadian doctors leave to work in countries that pay more, and tax less.
I can’t believe that in America, there are people out there who do not know how prices are set in a free market economy. In a free market economy, when demand goes up, and supply goes down, then there is a shortage, and prices rise. You would think that the public school teachers would understand basic economics, and teach it to children. That’s what they are paid to do. But not only do the young people not understand basic economics, the teachers in the public schools don’t understand it either. It’s the blind leading the blind.
WINTERY KNIGHT 