As workers and middle class Americans continue to be squeezed by Joe Biden inflation, the inability of wages to cover housing costs continues to create a burden in the housing market.

Investment groups are purchasing hard asset real estate, which continues to keep upward pressure on home values. However, ordinary Americans are no longer able to afford upgrade or starter home purchases.

Potential homeowners are forced to continue renting as prices for everything including food, gasoline and energy costs skyrocket.   Scraping by is JoeBamanomics in action.

(CNBC) – In a grim sign for the housing market’s busiest season, pending home sales, which measure signed contracts on existing homes, fell 4.1% in February compared with January, according to the National Association of Realtors.

Sales were down 5.4% compared with February 2021. Analysts were expecting a slight gain. This is the fourth straight month of declines in pending sales, which are an indicator of future closings, one to two months out.

[…] Today’s potential buyers are facing an expensive market. The median monthly payment on a new mortgage is now taking up a much larger share of a typical consumer’s income. It jumped 8.3% in February compared with January, according to a new index from the Mortgage Bankers Association. It is nearly 22% higher than it was in February 2021. For borrowers on the lower end of the market, that monthly payment is up nearly 10% month to month. (read more)

As March comes to an end, be prepared for the first quarter GDP release (last Friday in April) to begin telling the real story of how devastating inflation has become.

GDP is the estimation of all goods and services produced in the U.S. economy minus imports.  The GDP is measured in the value of those goods and services, meaning the rate of inflation is embedded in the GDP calculation.   What we are likely to see is actual GDP contracting, but the inflationary impact may give a false estimation.

The actual quantity of goods produced, goods sold and services rendered, has almost certainly declined; however, with the valuation of those goods carrying inflation in the price, the dollar estimation of the economy will look less bad.

Take care of the durable goods you own. Keep up the maintenance on your car, home and costly appliances.  Repairs and replacements can be devastating.

Inasmuch as you have prepared to withstand the inflation and increased scarcity of highly consumable goods like food, do not forgo proactive upkeep and maintenance on your vehicle, property and home HVAC system.  Protect your family, guide your family, stay strong for your family… by staying in the right box.

Share