Morning Wire The Smoke And Mirrors Economy | 11.5.23
5 snips
Nov 5, 2023 Mitch Rochelle, a market expert and managing director of Madison Ventures, dives into the turbulent U.S. housing market. He highlights how soaring interest rates have cut median income households' purchasing power in half since 2020. Rochelle discusses the struggles faced by middle-class families with rising income requirements and dwindling savings. He also uncovers the paradox of high consumer spending amid growing debt, questioning the sustainability of current economic trends.
AI Snips
Chapters
Transcript
Episode notes
Declining Housing Affordability
- Housing affordability has plummeted, with the average American family now able to afford only half the house they could in 2020.
- Rising interest rates and increased housing costs are the primary drivers, impacting middle-class families significantly.
Impact of Interest Rates on Inventory
- High interest rates discourage homeowners from selling, leading to historically low housing inventory.
- This low supply, coupled with consistent demand, keeps home prices elevated.
Housing Supply Constraints
- The housing market faces a supply shortage driven by high land, lumber, and labor costs.
- Local anti-development legislation and a NIMBY mentality further restrict supply growth.