(The Economic Collapse Blog)—When are we going to wake up and admit that our system is failing? If close to half of our young adults find themselves needing to live with their parents, we have a major crisis on our hands. Yes, there are some young people that are simply lazy and don’t want to work hard enough. I definitely understand that. But most young adults in America today don’t actually want to live with their parents.
Given the opportunity, they would love to have their own homes. Unfortunately, home prices have risen to absolutely absurd levels and housing in America is now more unaffordable than it has ever been before.
I feel so badly for the millions upon millions of young people that are struggling so much right now.
We encourage them to pile up giant mountains of student loan debt without ever considering the consequences, and then once they get out into the real world they quickly discover that the cost of living has become extremely suffocating.
As a result, vast numbers of young adults are finding that it is necessary to move back in with their parents…
Nearly half of all young adults are living with their parents — and they’re not ashamed to say it.
Moving out and living on your own is often seen as a marker of adulthood. But dealt an onerous set of cards — including pandemic lockdowns, decades-high inflation, soaring student debt levels and a shaky job market — young people today are increasingly staying put. What’s more, it’s no longer seen as a sign of individual failure.
Needless to say, this is not a good thing for our society.
The last time that such a high percentage of young adults were living with their parents was during the aftermath of the Great Depression…
These days, about 23 million, or 45%, of all Americans ages 18 to 29 are living with family, roughly the same level as the 1940s, a time when women were more likely to remain at home until marriage and men too were lingering on family farms in the aftermath of the Great Depression.
So why is this happening? One of the primary reasons why this is happening is because high interest rates have pushed housing costs to insane levels.
This week, the average rate on a 30 year fixed mortgage reached 7.19 percent…
US mortgage rates remained flat this week, hovering over 7%, where they’ve been for six consecutive weeks as inflation pressures persist.
The 30-year fixed-rate mortgage averaged 7.19% in the week ending September 21, a tick up from 7.18% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 6.29%.
“Mortgage rates continue to linger above 7% as the Federal Reserve paused their interest rate hikes,” Sam Khater, Freddie Mac’s chief economist, said. “Given these high rates, housing demand is cooling off and now homebuilders are feeling the effect,” he said. “Builder sentiment declined for the first time in several months and construction levels have dipped to a three-year low, which could have an impact on the already low housing supply,” Khater added.
And this isn’t even going to be the peak.
In fact, NAR chief economist Lawrence Yun is warning that “in the short run, it’s possible that mortgage rates may go up to 8%.”
8 percent? Are you kidding me?
Even now, mortgage payments have escalated to absolutely crazy heights. Earlier this week, the following example was posted on Twitter by Amy Nixon…
This home sold in 2021 for $685,000
Buyer’s monthly payment? $3526
Buyer’s monthly payment today? $8402
“But wages went up!”
“But people have cash now!”
NO—THIS IS COMPLETE INSANITY
STOP PRETENDING IT IS NOT
She is right. This is nuts.
Only a very small percentage of the population can afford such monthly payments, and so millions of potential buyers are being sidelined. And millions of potential sellers are being sidelined as well, because most of them would need to purchase another home if the current home they are living in was sold.
So the vast majority of us are trapped in our homes right now. Most of us simply cannot afford to move because the mortgage payments would be way too high. Obviously, this is one of the main things that is greatly depressing home sales right now.
Sales of previously owned homes declined again in August. If you can believe it, they were actually down a whopping 15.3 percent from the already depressed level that we witnessed in August 2022. If you want to thank someone, thank the officials at the Federal Reserve, because they created this mess. Overall, Fannie Mae is projecting that this will be the worst year for home sales since 2011…
US home sales are headed for the biggest slowdown since 2011, according to Fannie Mae.
The government-sponsored mortgage finance company forecasted total home sales to slump to just 4.8 million this year, marking the slowest sales environment since 2011. That figure will only improve slightly in 2024, with total home sales expected to hit 4.9 million, Fannie Mae economists said.
If our young adults cannot afford to purchase homes, at least they can afford to rent places to live, right?
Wrong.
In recent years, rents have skyrocketed all over the country.
At this point, the national median asking rent in the U.S. is over $2,000 a month…
Landlords are continuing to ask near record-high rents amid a tight housing market, but tenants in some parts of the country are still finding deals, according to a new study from Redfin.
The asking rent in August was $2,052, up slightly (0.7%) from just a month earlier when the asking rent was $2,038.
When I was a young adult, I remember renting an apartment for $300 a month. And I thought that was expensive.
Coffee the Christian way: Promised Grounds
Unfortunately, I don’t see much help for our young people on the horizon. The Federal Reserve does not plan to cut interest rates any time soon. And it will be quite some time before housing prices decline enough to be considered “affordable”.
So if you are a parent, please be patient with any young adults that you currently have living at home. Factors outside of their control have made housing more unaffordable than it has ever been before, and economic conditions are going to continue to get harsher all around us.
Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
