(Zero Hedge)—In a new poll conducted by the Financial Times and Michigan’s Ross School of Business, data shows there is a rare bipartisan agreement among Republicans and Democrats – Both sides believe that there are no housing advantages for the their political opponents and 70% of leftists, independents and conservatives alike rate affordability as one of their top three concerns. In other words, Americans disagree on almost everything else, but they all recognize that most of them are in deep trouble when it comes to keeping a roof over their heads.
It’s not just the math, it’s the daily drain on people’s pocketbooks that makes the problem so undeniable.
While the Biden Administration has spent the better part of the past year claiming that “inflation is going down” the reality has been far more bleak. Surveys also show that 62% of homeowners has struggled at least periodically in the past year to make their mortgage payments and half of all renters also reported difficulty keeping up with monthly payments. Over 22% skipped meals, 20% worked extra hours and 20% sold belongings to pay their housing costs on time.
Disturbingly, 60% of poll respondents who make $100,000 or more per year also ranked housing costs at the top of their list of worries going into 2024. Meaning, the crisis is spreading well beyond low income families and is dragging down the middle class.
Low income, fixed income and middle-income renters are all facing challenges. The market has become so disjointed that middle-income earners are finding it nearly impossible in most states to find homes in their price range, either to buy or to rent.
The average middle class income is $58,000 to $98,000 annually. The average yearly cost of a family home rental is $25,000 ($2100 a month and nearly half of a single earner’s income on the low end of the middle class average). This greatly supersedes the common 30% rent rule which suggests that housing should not eat more than 30% of a renter’s salary. In 2019 the average monthly rent for a home was $1400; that’s a 50% increase in the span of only four years.
In order to safely afford the monthly median home rental price of $2100, a tenant must make over $6000 after taxes per month. This cuts more than 50% of the population out of the market. It’s not just the cost of housing, though, there’s also a major crisis in availability.
Across the US there is a shortage of at least 7.2 million homes affordable and available to renters with extremely low incomes. Extremely low-income renters face a shortage in every state and major metropolitan area. Middle-income housing is vanishing; known as the “missing middle”, this portion of the market has been bought out and inflated to the point that elasticity in prices has been crushed right along with home buyers and renters. That is to say, if you make less than six figures then you are quietly and quickly being strangled out of housing access.
But how do we solve this ongoing problem? Government rent controls won’t do anything other than create a larger shortage by scaring property owners out of the rental market. The Federal Reserve’s (supposed) attempts to use higher interest rates to deflate the bubble without triggering consequences to the greater economy have utterly failed. The conundrum is that the biggest property buyers in the country are supported by the central bank and thus they remain unaffected by higher rates.
These are massive corporate buyers like Blackstone and Black Rock which invest in companies that buy US houses. Black Rock by extension owns a stake in nearly 7% of the nation’s total rental properties. In 2023 corporate investors accounted for 27% of all family home purchases. Even in the case of house flipping, corporate purchases on a large scale tend to drive up prices for everyone else.
Then there’s the issue of illegal immigration which is adding millions of “asylum seekers” every year to the population; all of those people are looking for housing. With government programs and subsidies helping them they eventually find that housing, allowing them to eat up another piece of the pie. This leaves legal citizens in the lurch and struggling with low availability.
Finally, there’s general inflation. Building costs for materials and labor have skyrocketed, meaning building new houses might help over many years to stabilize the market but it does not solve the immediate supply crisis and the inflation associated with it. Americans don’t need more expensive houses, they need more affordable houses.
To alleviate the crippled market conditions today would most likely require state imposed moratoriums on corporate home purchases, a moratorium on foreign purchases, not to mention the direct removal of illegal migrants. Taking action on all three would free up supply and at least give US citizens room to breath by cutting back on their top most expensive necessity. At bottom things cannot continue the way they have been otherwise the system can and will break under the pressure, leading to even worse economic outcomes.
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.
