Hello. Today we look at President Joe Biden’s plans to invest in housing, what South Korea’s shrinking population signals for the world and the Federal Reserve’s bloated balance sheet.
Biden’s Housing Challenge
Covid-19 threw what was an already-complex American housing system for a loop.
On one end, Black and Hispanic households lost jobs at faster rates than White families and are more likely to be behind on rent or mortgage payments.
At the other, the Federal Reserve’s easy monetary policy sent mortgage rates to historic lows, allowing the well-heeled to refinance and buy second properties. Many first-time buyers are finding themselves shut out of the booming market. Data on Tuesday showed home prices surging the most since 2005.
“If you don’t have excellent credit, if you don’t have a really high and competitive down payment, and if you don’t have the ability to go over ask, good luck,” says Ali Wolf, chief economist at Zonda, a housing data and consulting firm.
The challenges of the pandemic come on top of extremely complicated U.S. housing policy. Since the 1930s, the federal government has rolled out layer upon layer of programs and incentives to help the poor, middle class, veterans and others afford homes. In other words, no national housing policy from the ground up.
Source: Bloomberg
