The American Dream is out of reach for most Americans. That is the conclusion of a recent Wall Street Journal survey which found 56% of Americans are not confident they could buy a home right now if they wanted to. The median home price is now eight times the average household income, while interest rates are double what they were just a few years ago. Even more "affordable" markets like Houston have seen prices jump in recent years.
While the trend of rising home prices has accelerated in the past decade, it has been taking place for decades. In fact, some analysts trace the issue all the way back to the 1971 move by President Richard Nixon separating the U.S. dollar from the gold standard. Others point to more recent economic trends for exacerbating the problem. "The Fed goosing demand by keeping interest rates so low during 2020 and 2021, that pushed up demand for housing," says Allysia Finley, Wall Street Journal columnist on Fox News. "As a result, housing prices rose, and now combined with the higher interest rates, that is really why housing has become less affordable."
The White House is aware of the issue, as well. Treasury Secretary Scott Bessent recently said President Trump may declare a "national housing emergency" this fall, although he didn't elaborate on what that would entail. Federal action could address prices by increasing homebuilding and easing access to the market for buyers. But critics warn that prices and interest rates are only part of the problem. "There are also very high property taxes, which is a local problem, and high insurance costs," says Mary Anastasia O'Grady, Wall Street Journal columnist on Fox News. "So affording a home is not just paying the mortgage, but paying all those other additional costs that are charged by the local government."
"So I'm not sure this is something the federal government can do much about."
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