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The American (Pipe) Dream
Good news for America's 45 million renter households: Thanks to lower mortgage rates and, secondaril
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When you stop investing in a country’s infrastructure to the point it slowly deteriorates over 50 years this is where you end up. When was the last great US investment in infrastructure. The last I can recall is Eisenhower’s interstate road system. In the 21st century we’ve only invested in digital infrastructure. Since we live more and more in the ‘cloud’, I guess it figures that’s where all the investment goes. It reflects on what happens when short term monetary gain is your foundational prime directive.
On the other hand the advantage of digital infrastructure investment is that you can own a plot of LAND in Sandlot for a mere $10K or so.
Boy is history rhyming.
The housing crisis in the Roman Empire, particularly in Rome during the Republic and early Empire, was characterized by extreme population density, soaring rents, and hazardous living conditions for the poor. Residents lived in crowded, multi-story apartment complexes called insulae, which often collapsed or burned due to shoddy construction and lack of regulations.
Social and Economic Consequences
Evictions and Homelessness: Many Romans faced constant, the threat of eviction, leading to widespread homelessness, with people living in public porticos, or even using tombstones for shelter.
Declining Quality of Life: High costs and, cramped conditions contributed to, poor living standards for a large percentage of the population.
Impact on Society: The inability of the poor to afford housing contributed to social unrest and, in some cases, a decline in, civic participation. <- THIS
First off, houses were cheap relative to income in 2019, due the housing crash and ensuing low rates. I have been saying on this site that I expected incomes will outperform house price appreciation for awhile. This is a long haul process. The only way to accelerate this process would be a price crash. Nobody wants that. Mortgage/treasury basis is wide for a number of reasons. I expect that to narrow. And rates overall should trend down. To sum I believe mortgage rates should meander 100 bps lower over time and prices should lag income growth. But it is a multi year process. There is no quick fix