ANOTHER “FUNDAMENTAL” OF THE U.S. ECONOMY SHOWS WEAKNESS …
By FITSNEWS || As we’ve noted already today, no matter who wins the 2014 midterm elections (and it appears obvious “Republicans” are headed for victory) … nothing is going to change. Hell, “Republican” Senator Lindsey Graham is already touting tax hikes … clear evidence that GOP control of the U.S. Senate is shaping up to be about as worthless as GOP control of the U.S. House.
No matter who wins, we’re looking at the perpetuation of a status quo that’s slowly choking the fundamentals of the American economy – including the “American dream” of homeownership.
According to the latest data from the National Association of Realtors (NAR), first time home buyers accounted for 33 percent of all purchases this year – the lowest mark in 27 years. That’s down from 38 percent in 2013 and down from 50 percent in 2010.
“Rising rents and repaying student loan debt makes saving for a downpayment more difficult, especially for young adults who’ve experienced limited job prospects and flat wage growth since entering the workforce,” NAR’s economist Lawrence Yun noted by way of explaining the data.
Making these numbers even scarier? The sheer size of the “millennial” generation … which despite is breadth of numbers has “less disposable income, and thus fewer assets,” according to the website Zero Hedge.
Less income … fewer assets. In the fifth year of a “recovery?”
We’ve said it before, we’ll say it again … “the center cannot hold.” The people who are supposed to be driving the economy cannot do their jobs unless they have jobs … and they won’t get jobs if the consumer economy continues to be subdued by the subsidization of the welfare state, the warfare state and the Washington, D.C. favor factory.
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26 comments
I’m only 27. I was gonna buy a home, with my young wife. But then them Apple 6 phones came out. Man, they were a little pricey, and the data plans really hit you. But we just had to have them. So – I guess we’ll just have to put off buying our first home until next year.
This. Consumerism over saving.
Houses are really great when the a/c takes a dump the same month the water heater and refrigerator do too.
DONT VOTE HALEY TOMMRROW. …THE WITCH HAS MADE ENOUGH MONEY FROM HER CORPORATE PIMPS! !!!!! $$$$$$
I agree Grady.Democrats should vote on Wednesday, NOT ‘toMMrrow’.
I suggest strict credit requirements have something to do with it too. Ben Bernanke had problems refinancing his home recently, so that tells you something. I think it is a good thing too. We know what happened after the loose housing loans of the 2000s.
Yep. I had a good credit score when I got my house recently, they also said I had to have three open lines of credit for the bank to even consider it. It all worked out though, got a decent house for a decent price and 3.5% fixed, can’t really argue with that.
Rental prices are absolutely crazy in Charleston. Even in Columbia ,,,,, Amazing what slumlords want for a run down roach infested house or apartment. The rent is double the slumlords mortgage payment and then some. You are better off trying to buy than rent.
My daughter moved from Columbia to Charlotte this summer. Her apt in Columbia was a little on the high side, but compared to the ones in Charlotte (in a non-thug area) it was a bargain. The rent for her Charlotte one bedroom is more than the mortgage payment for my 3 bedroom home.
Spot on regarding Charleston. Greedy, self-absorbed, money-grubbing bastards.
We are reliving Charles Dickens’ times.
Back in 2007 legislation was passed that dumped school tax in the laps of non owner occupied properties, causing their tax bills to triple. You can partially thank South Carolina law makers for skyrocketing rent.
Slow down there! How about look at the difference in owner-occupied tax rates versus non-owner-occupied tax rates?
It is absolutely insane. In Richland county, a house valued at $100,000 (per the county) can expect a meager $700 property tax bill–if this is the owner’s primary residence. The minute he moves out and claims primary residency elsewhere, he can expect the tax bill to adjust to somewhere closer to $2500. Now, he’s supposed to collect over $200 just to pay the taxes.
The non-owner-occupied property taxes have steadily and continually risen at alarming rate.
The whole 4% vs. 6% tax base is completely false and misleading. Sure, the original basis comes from 4% or 6%. However, every time we increase ad valorem taxes, it shows up as a paid for credit for owner-occupied properties. Thus, the disparity continues to grow.
In sum, while I agree that rent can cost significantly more, and it could very well be caused by greed (at some level), don’t discount the impact that our joyous and bloated government has made on the cost of housing.
Slow down there! How about look at the difference in owner-occupied tax rates versus non-owner-occupied tax rates?
It is absolutely insane. In Richland county, a house valued at $100,000 (per the county) can expect a meager $700 property tax bill–if this is the owner’s primary residence. The minute he moves out and claims primary residency elsewhere, he can expect the tax bill to adjust to somewhere closer to $2500. Now, he’s supposed to collect over $200 just to pay the taxes.
The non-owner-occupied property taxes have steadily and continually risen at alarming rate.
The whole 4% vs. 6% tax base is completely false and misleading. Sure, the original basis comes from 4% or 6%. However, every time we increase ad valorem taxes, it shows up as a paid for credit for owner-occupied properties. Thus, the disparity continues to grow.
In sum, while I agree that rent can cost significantly more, and it could very well be caused by greed (at some level), don’t discount the impact that our joyous and bloated government has made on the cost of housing.
Amen, I have a 1500 sq/ft house in Elmwood Park… $1000 when I lived there, turned rental it went from 4% to 6% which was manageable… then the school tax break came along and it jumped to $4200. Anyone who saw their property taxes significantly decrease in 2007 can thank anyone who owns “investment” property.
Right on! I’m right there with you. (Except I have several more rentals–some I used to personally live in as well).
But lets take your house as the perfect example to further prove my point.
Say your mortgage payment was roughly $1200 PITI. Rent market says you should get around $1300-$1400/month.
As soon as the tax switch is “flipped.” Now you’ve got an extra $3200 in taxes owed. Where does that come from? So now you have to collect an extra $270/month, just to pay the additional tax increase. Now your payment is $1470 PITI. Will you rent at a loss? Will you rent to break even and have zero profit…or no ability to cushion expected repairs expenses?
Of course not.
I have zero faith in anything Steve Benjamin has done for Columbia this far, but my only hope at ever seeing my “investment” yield significant return would be for the Bull Street project to be such a huge success that it inflates property value in the adjacent neighborhoods. Pipe dreams.
This sounds like a life long renter that has no concept about property taxes, maintenance fees, insurance, etc.
Millennials were teenagers listening to their parents brag about the skyrocketing value of the family home. They heard realtors swear that real estate was going to keep increasing in value forever, even the crappy vinyl houses 30 miles outside of town. Then the Millennials watched as the bubble burst and people were forced out of their homes.
Homeownership has always been partly psychological. It was the American Dream. Now that psychological bubble has been burst and replaced with a healthy skepticism.
I spent A LOT of my teen years listening to my parents talk to Realtors about prime markets and based my life’s direction off that like most of the rest I CERTAIN…
What? Please try to use complete sentences.
Renting is the biggest waste of money there is. You are making the owner’s payments for him and have nothing to show for it but a hand full of rent receipts. I would rather be paying for a used trailer on a 1/4 acre lot than renting any time. There is no wealth accumulation in renting.
Generalize much? While I agree, that in most scenarios, owning is the better option, by far…there are certainly many other scenarios where one is in a better position to merely rent.
For example, if I am a visiting professor at the local college and will only be in town for 9 to 12 months, is it correct to say that this is the “biggest waste of money there is?” (of note, this is merely a hypothetical)
You’re continuing to show your lack of credibility with these overly broad posts.
I was speaking from personal experience. Less than say five years at a given location I could see renting if you have no desire to live in the area, but to live in the same area all your life and pay rent is ridiculous.
I am a long-time real estate broker. Once I had two accountants conduct a complete analysis on home ownership independent of one another. Both are homeowners. Based on minimal returns in the market of 5% annually, each came back with the same conclusion. Starting at age 22 a first time home buyer would be better off to live within his means and rent for the first 15 years and then pay cash or nearly all cash for a home that he can afford. Now that I am older and retiring I share this with anyone who will listen. The properties that I have accumulated really start to run high maintenance costs at years 10-15 and will generally erase any gains. Home construction is a way to prop up an economy for a country who exports very little.
I am a long-time real estate broker. Once I had two accountants conduct a complete analysis on home ownership independent of one another. Both are homeowners. Based on minimal returns in the market of 5% annually, each came back with the same conclusion. Starting at age 22 a first time home buyer would be better off to live within his means and rent for the first 15 years and then pay cash or nearly all cash for a home that he can afford. Now that I am older and retiring I share this with anyone who will listen. The properties that I have accumulated really start to run high maintenance costs at years 10-15 and will generally erase any gains. Home construction is a way to prop up an economy for a country who exports very little.
Maybe because these slackers are still living at home and have no need or desire to move out on their own. That would mean a job and responsibility, and they don’t have time for all that.