Here you go. You’ll notice GDP has no bearing on the affordability discussion.
“For goods and services, as of 2023, blue states were only 7% and 6%, respectively, more costly than red states. For housing and utilities, this jumps up to 52% and 45%. And, according to the Bureau of Labor Statistics, housing and utilities account for about 33% of Americans’ total expenditures”
Income does. Is that related to GDP?
Housing is expensive because of demand driven by people wanting to live in these states.
Looks like success created demand.
Blue states are more likely than red states to have large metro areas that produce high incomes and strong housing demand. In 2023, the average blue state had a median household income of around $87,000, compared to around $69,000 in the average red state.
Large metro areas that generate agglomeration advantages for firms and workers are a huge benefit for blue states, and to the country as a whole. Indeed, throughout American history, people have migrated from poorer, more rural areas, to cities and suburbs to chase higher wages and greater opportunity. And throughout the greater part of the 20th century, the housing stock in high-opportunity metro areas expanded to accommodate this in-migration and keep housing costs from rising too quickly.
Being confidently wrong still makes you wrong.
The housing affordability issue includes higher prices for those who wish to buy a home, and higher rents for everybody else. Increasing supply, whether it be for lower income or higher income people, helps drive down prices for all homebuyers and renters. Increasing supply alone might not be enough. Rental assistance can help those on the lowest rung of the economic ladder.
It’s not like that at all. It’s like saying building more sub $25K cars is going to relieve price pressure on $50K cars.
Why do they want to live in those states? Is it because of Democratic policies or these are attractive areas to live in spite of or despite those policies? On the whole, are those policies helping or hurting with affordability?
Yes, high paying jobs in attractive geographical regions will drive up demand. It’s why we are seeing a migration to other areas like Nashville, Dallas, Miami, Houston and other areas as businesses relocate to more favorable environments.
Of course it can. The question is it scope. It will help a select few and then drive up the number of renters competing for the supply of properties in that price strata and higher.
It’s not complicated. Let’s say you can afford an apartment that cost $2,500 a month but I can only afford one that cost $1,500 a month. The govt taxes you to subsidize my rental income so I can pay $2,500 month. There are now 2 eligible consumers instead of 1.
Neither of us can still afford a mortgage and other monthly housing cost at $5k per month. So, prices in that range become unaffected by the above potential renters. However, if it requires further taxation to subsidize the poorest renters, it may reduce the net income of higher wage earners, inadvertently harming demand further up the food chain or reducing overall disposable income.
Now, we could do what the Biden administration proposed which is just give out down payments to lower income buyers. It’s great for net sellers because it means more people with the adequate cash to cover the purchase price and probably drives up the cost. In addition, if we have to print more money to fund the program, it of course exacerbates overall inflation and then the longer term debasement of the currency.
Then local politics is not the driving force in housing prices in all of these areas (it’s jobs and geography) and local politics is not causing the disasters.
We agree, the market is the most significant driver. Policies do exacerbate the problem in many cases. With that, since they are not the primary driver, Govt’s can really only have a limited impact to solve the affordability issue. Again, I think it goes to my primary point of continuing futility of adding to the debt and deficit with only minor influence on overall affordability.
JPMorgan Chase & Co. is vowing to funnel $750 billion into housing over the next decade, nearly 40% more than it has over the past 10 years, as part of Chief Executive Officer Jamie Dimon’s push to invest more money in US communities.
The firm plans to finance the construction or preservation of 1 million affordable housing units and help 500,000 consumers buy homes, according to a statement Monday. It will also advocate for “pro-growth housing policies,” including by joining the US Chamber of Commerce’s Housing Advisory Council as chair.