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The Housing Crisis

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When the Fed raised interest rates, they apparently forgot that every time they have done so in the past inflation only increased. So, this time they really added salt to our already critically wounded economy. The dire conditions millions face remain unabated whenever the Fed acts. We have to remember that the Great Depression made millionaires in a time of the greatest financial and economic calamity of the 20th century. Today, the justification for interest rate hikes is basically the same. The profiteering of many individuals and corporations have unleashed a cataclysm of financial hardships that has expanded to almost 4/5 of the US population. Essentially what is happening is nothing more than price gouging. Yet state and federal government have proved ineffective to address what is already becoming one of the worst housing crises since the Great Depression.

Today, the housing market is ripe with greed, corporate residential property owners and a multitude of complicit individuals in Wall Street that have made an existing housing crisis that much worse. What should be done to ease what is already a travesty for the American public hasn’t been a priority in any legislation and probably won’t be unless we demand price controls and a relaxing of credit scores to enable more people to afford rental property and home ownership.
The existing governmental housing assistance process are filled with flaws loopholes and complicated jargon that millions are still unable to access. With the deck already stacked against them by unrestricted price rent controls, qualifying credit scores, wage restrictions, foreclosures. and evictions have only exasperated an already homelessness emergency.
Following the 2008 housing crisis little effort was made to make either home ownership or affordable rental properties an actual reality for millions of Americans. The African American and Hispanic communities bear most of the brunt of the housing crisis today. The failure lies with governmental policies past and present that are directly or indirectly responsible for creating the greatest wealth disparity gap in history.
The inflationary trends we are currently facing are the results from foreign and domestic policies that have stacked the deck against millions of Americans. Our government has actually stripped away the majority of the publics ability to enrich their lives. The erosion we are seeing today with the demise of home ownership and an increase in corporate rental properties with unrestricted price controls only contributes to the overall decline of the American economy.
Nowhere in our society today is the actual institution of home ownership more important to secure the stability of not only local communities but for the overall economic stability and security of a nation. The realization of owning a home is so paramount to remedy this nation’s economic crisis. With the number of current foreclosures continually escalating the United States will never regain the economic prominence that we had during the housing boom of the 1950′s and 1960′s unless more people are able to buy and become part of that paternal brotherhood of home ownership. It is of vital importance that the more people have the ability to actually purchase and stay within a home. This creates a greater economic impact in every local community through-out the country.
What has occurred during the last three decades is that more people are being denied the opportunity to own their own home or are forced out because of foreclosure. There are a lot of factors that have been contributing to the increase of individuals who can’t qualify for any type of mortgage or are being denied the opportunity to stay in their own home. One of the more obvious reasons is the lack of middle-class jobs. Ever since 1994 the evaporation of middle-class employment opportunities has continued to vanish at a rate of over one million per year. This continuing erosion of middle-class employment only compounds the problem in why so many people are not buying, able to buy, or able to keep their homes. When job loss, stagnant wages or worse yet, reduced wages with the various types of mortgages that people get themselves into like an adjustable rate the problem of facing foreclosure is much greater now than ever before. This is what is happening today. The mortgage meltdown is crippling every community across the country.
Recent economic studies all indicate that owning a home produces long term economic growth for each local community. Individually the concept and actual home ownership instills emotional benefits of security, stability, and a genuine sense of pride. In communities where more families are owning homes the social benefits far outweigh the effects when banks or financial institutions foreclose. One of the most important social as well as economic impact of home ownership is how it affects children of families when they reside in their own home. Home ownership has proven that children perform substantially better academically in school. It has also been proved that homeowners are more involved in their children’s lives especially when it concerns to their education. Another fact is that homeowners move less often than those who rent. This brings the stability that children need to further increase the child’s success in their school. Another study has shown that even though owning a home enhances educational standards for children the neighborhood stability that is a direct correlation with more home ownership further increases each child’s ability to succeed in school.
The communities with more occupied homes are more cohesive. Each family enjoys better communication. The overall economy is stronger and more stable when more individuals and families reside in their homes. Another economic impact is that homeowners spend more money to improve their home and are more engaged in enhancing their neighborhood. All of which spurs economic positive momentum. this in turn signifies those homeowners take more positive steps in producing better and stronger communities. When given a choice the average homeowner is 28% more likely to repair their home,15% more likely to vote,12% more likely to maintain a garden outside their home, 10% more likely to be involved with local community groups like the PTA and most homeowners will live 4 times longer in a particular community. This all translates again to positive economic growth and stability in communities where more individuals are able to buy and stay in their homes.
As beneficial as home ownership is to all local community’s homeowners are more active, connected and involved with their own families. Whether it is volunteering at local schools, coaching various sport teams, or becoming scout leaders are some of the types of activities that only more homeowners are active in. These types of community involvements only further produce positive social and economic impacts upon all communities.
When people are able to become a homeowner these individuals achieve a greater degree of life satisfaction, self-esteem, and a certain perceived control over their lives. In addition to being more content with their own personal situation than renters, homeowners enjoy better physical and psychological health. Where the children are concerned 20% are less likely to become teenage mothers. The escalating teenage pregnancies that are plaguing most urban areas all across the United States would fall by over 20% if the parents were able to buy, maintain, and stay on as homeowners. in addition, homeowners have a violable financial stake in the value of their homes. We can conclude that owners have more of an incentive to deter crime by forming and implementing voluntary crime prevention programs. This reduces crime and adds more value to each home.
The bottom line is that being a homeowner has a very large important impact in each neighborhood, town, city, state and through-out the country. This is because home ownership creates jobs: remodeling, landscaping, lawn maintenance, and all the other industries that are connected with owning a home. It is found that each owner generates as much as $60,000 of economic activity every year in local communities.
Still there remains a very large portion of the public that can’t qualify for a home loan, isn’t able to make their mortgage payments anymore, and is trapped into high interest rates because they can’t qualify for any type of loan modification in order to be able to continue to make their mortgage payments. In each case the ones that suffer are the children, local communities, surrounding townships, their state and this country. Now the question remains how to actual achieve the desired economic impact for local communities all across the United States. One that produces lasting economic growth and stability.
Up until now there has been no silver bullet for the continuing economic crisis brought on by the mishandling of mortgages by the banking industry. In the good old days, banks used one simple rule to qualify people for a mortgage and that was you could only qualify for a house based on 25% of your gross income. There were no sub-prime or Adjusted Rate Mortgages nor were there the selling of mortgages to mortgage brokers. There was just that tried-and-true rule that worked for years. Only when the banks tried to improve on what already worked and realized that more money would be made easily and quickly by changing the rules that we ended up creating what has become a major economic and financial travesty for millions of Americans.
The banking industry is still garnishing vast amount of wealth while those stimulus payments have had really no effect or impact on current economic conditions. Worse still the United States is not helping the rest of the world’s economies. Our fractional reserve banking system is on the verge of collapse. And until Washington realizes that the only way to preserve the US dollar is by restoring the gold standard. Only when the United States implements total economic reform can we recover from one of the gravest threats to our nation. The demise of individual homeownership and unrestricted price gouging on rental properties are two of the gravest concerns facing our nation today.

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