10 years after housing peaked, US is more of a renter nation

[webfact]

10 years after housing peaked, US is more of a renter nation
JOSH BOAK, AP Economics Writer

MOUNT PLEASANT, S.C. (AP) — It's a troublesome story playing out across America in the 10 years since the housing bubble peaked and then burst in a ruinous crash: As real estate has climbed back, homeowners are thriving while renters are struggling.

For many longtime owners, times are good. They're enjoying the benefits of growing equity and reduced mortgage payments from ultra-low rates.

But for America's growing class of renters, surging costs, stagnant pay and rising home values have made it next to impossible to save enough to buy.

The possible consequences are bleak for a nation already grappling with economic inequality: Whatever wealth most Americans possess mainly comes from home equity. An enlarged renter class means fewer Americans can build that same wealth and financial security.

Nearly two-thirds of adults still own homes. And some who rent do so by choice. Yet ownership has become a more distant dream for the many Americans who still regard it as a route to prosperity and pride. The problem has become especially severe in areas that offer the best job prospects as well as those that have been battered by foreclosures.

"It doesn't paint a pretty picture," said Svenja Gudell, chief economist at Zillow, the online real estate database company. "You're really blocking out a group of buyers from owning a home. They're truly living paycheck to paycheck, and that does not put them into a good position to buy."

Joe Fabie and his wife face just such a bind. They moved to Mount Pleasant, just over the bridge from historic Charleston, South Carolina after law school in Pittsburgh. The suburb's pastel-hued harbor vistas, tin-roofed houses and Spanish moss-adorned live oaks were enchanting.

But the rising rent on their one-bedroom apartment — more than for their three-bedroom rental in Pittsburgh — made it impossible to save enough to buy a home. With their rent going up again, the couple moved to a cheaper suburb in hopes of repaying their student debt and saving for a starter home.

"The best school district is Mount Pleasant, and we would like to be there," said Fabie, 27. "But if you're lucky you can get some beat-up homes for around $300,000."

An exclusive analysis by The Associated Press of census data covering over 300 communities found that two major forces are driving a wedge between the fortunes of renters and homeowners:

—Historically low mortgage rates have enabled homeowners to refinance and shrink their monthly payments, thereby reducing a major household cost. The median annual mortgage expense for a U.S. homeowner has dropped by $1,492 since 2006.

—A combination of foreclosures and new college graduates crowding into the strongest job markets has raised demand for rentals. Renters accounted for all the 8 million-plus net households the United States added in the past decade. Home ownership has dipped to 63.5 percent, near a 48-year low.

That demand has driven up rents, which in turn have prevented or delayed people from buying first homes.

The government says if you spend more than 30 percent of your pretax pay on housing, you are "cost-burdened." The total number of renters in that category has jumped more than 30 percent in the past decade, to 21.2 million. Half of all renters are now considered cost-burdened, compared with just 24 percent in 1960.

These trends are reflected in how and where Americans live. Suburban cul-de-sacs built for owners are now tilting toward rentals, especially in such areas as Orlando, Las Vegas and Tampa, where the bubble and crash were especially intense.

After the bust, investors bought distressed houses in these communities at sharp discounts and rented them out. Many of the new tenants belong to Generation X households — ages 35 to 51 — that began renting after the crash, according to the Harvard University Joint Center for Housing Studies.

Rents have also jumped in areas that absorbed many young college-educated job hunters. These workers have increasingly clustered in areas, including Boston, San Diego and Washington, with abundant jobs but high housing costs. The result is delayed home ownership for a population group that historically had the means to buy.

The AP analysis also found a contrasting belt of stability across the Midwest where the housing boom and meltdown had little effect on homeownership. Rates of ownership remained relatively stable, for example, in Minneapolis, St. Louis and Kansas City, Missouri, where starter homes are comparatively affordable.

But the transformations have been vast in other areas, particularly in smaller suburbs where much of the country lives.

Both before and during the housing boom, farmland around the country was bought cheaply and developed into houses, schools and shopping plazas — a build-out that ignited homeownership. Now, in a twist, many of those cul-de-sacs are occupied by renters living in homes whose former owners lost them to foreclosure.

To see just how drastically the foreclosure crisis transformed certain neighborhoods from the domain of owners into blocks of rental properties, consider the Orlando suburbs.

The shift has been vivid over the past five years in the Piedmont Park neighborhood of Apopka, a former agricultural hub now crowded with housing developments. Where one in 10 homes was once a rental, now more than a third are. Many are owned by Wall Street investment firms that bought them out of foreclosure at deep discounts.

Erika Pringley, a 42-year-old police dispatcher, rented with her husband a three-bedroom ranch house this year. Through a string of subsidiaries, the house is owned by Blackstone, the world's largest real estate private equity group.

Previously, the house had been owned for eight years by Damian and Eva Elizondo, who lost it to foreclosure in 2013. The Elizondos owed nearly $258,000 on the home; the investment firm bought it for roughly $100,000.

At that price, the equivalent of the monthly mortgage would be under $500.

Pringley's rent: $1,310 a month.

Pringley, who works for the Florida Highway Patrol, hopes to buy a home — if she can emerge from debt.

"I'm kind of tired of paying for somebody else's property," she said. "At my age, I want to own something that's my own, have something that's my own."

Making that leap to ownership is becoming harder for typical Americans. The average first-time buyer makes $84,559, much more than the average household income of $75,037 — the widest such gap in over 15 years, according to an analysis by the online housing marketplace BuildZoom.

The residue of the housing bubble also remains achingly visible in Las Vegas, where the gamble of no-money-down, interest-only mortgages ignited a rush of construction in 2006 that led to mass foreclosures.

Vegas recovered slowly. Tourists returned to the casinos. Population growth picked up as retirees flocked to the Nevada desert. Ikea opened its first Las Vegas outlet, not far from where 8,000 apartment units are planned for construction.

Still, thousands of houses are stuck in the foreclosure pipeline, controlled by banks, and could flood the market should prices recover enough. Nearly half of Las Vegas now rents, compared with less than 40 percent a decade ago.

This closes one of the paths to accruing wealth. On average, homeowners have a net housing wealth of $150,506, according to figures soon to be released by the Urban Institute's Housing Finance Center. That average climbs to $229,296 for those who own their homes free and clear, making the house an asset that provides a crucial financial cushion.

Elsewhere, rising prosperity is the reason why renters are stuck.

Just as the economy tanked nearly a decade ago, millennials began flooding the job market after college and graduate school. The most educated tended to cluster in cities where jobs were still plentiful, such as Boston, San Francisco, and San Diego. They now pay historically high rents — a result of too few apartments to meet demand and too few renters with enough savings to buy.

Over the past decade, the number of under-35 college graduates in Washington rocketed up more than 50 percent to nearly 100,000. Bistros, boutiques and posh gyms opened along the once-downtrodden 14th Street corridor. Builders erected condos and rehabbed old buildings into apartments.

All this has created a paradox in Washington: Incomes are rising — normally fuel for home buying — even as homeownership is declining. Average household income in the district has climbed an inflation-adjusted 8.7 percent since 2006 to $104,615, according to the Census Bureau. Yet ownership has dipped to 41.6 percent, from 45.8 percent.

Ultra-low mortgage rates have enabled Jim Phillips, 51, to capitalize on the influx, buying condos and renting them at a profit.

"With more and more younger people moving into the city, it's creating an opportunity for me," Phillips said. "So far, I have two condos. My goal is to buy, basically, one a year."

The opportunities are there for people who have money — or those who are already homeowners.

Americans have refinanced $9.4 trillion of mortgage debt after the bubble burst, according to the Mortgage Bankers Association. New mortgages at under 4 percent interest have freed up thousands of dollars annually for households in several metro areas, according to Census figures.

Alpana Patel and her husband landed a house in San Marcos, California, about 35 miles from San Diego, in 2007. To buy their $845,000 home, they took out an interest-only mortgage with an adjustable rate starting 6.7 percent. Including property taxes and insurance, their monthly costs totaled about $6,000.

The couple kept paying the mortgage through the housing bust before refinancing in 2013. Their new mortgage charged just 3.75 percent, which shrank their monthly payment by $2,000 and allowed them to build equity.

"We're actually able to pay down our mortgage, because initially we were just paying interest only," said Patel, a 42-year-old real estate agent.

The couple eventually decided to rent out that house at a price that covers nearly all their mortgage costs and to buy a second, larger home where they could live.

"Now, we're able to own two homes because we hung in there," Patel said.

What the housing recovery presented was a rare opportunity to capitalize on mortgage rates that had never dipped so low in anyone's lifetime. But even while millions of renters struggle to save enough to buy, many such homeowners have never had it so good.

"They're basically taking advantage of the changing economics of home ownership in ways that renters can't," said Andrew Jakabovics, senior director of policy and research at the affordable housing nonprofit Enterprise Community Partners.

___

AP writers Meghan Hoyer in Washington, Mike Schneider in Orlando, Florida, Alex Veiga in Los Angeles and Jim Salter in St. Louis contributed to this report.


-- (c) Associated Press 2016-06-21

[jadee]

Aren't these programs, low rates and opportunities exactly what led to the last housing bubble?

Ultra-low mortgage rates have enabled Jim Phillips, 51, to capitalize on the influx, buying condos and renting them at a profit.
"With more and more younger people moving into the city, it's creating an opportunity for me," Phillips said. "So far, I have two condos. My goal is to buy, basically, one a year."

It reminds me of the scene from 'The Big Short' where the guy asks the stripper - 'How many homes do you own? The Wall Street Journal is reporting that the very same types of risky loans that got the US into the 2008 mess (Adjustable-rate Mortgages Make a Comeback') are rising in popularity again. The market is just duplicating the same mistakes, the programs to get poor people to own homes are still in place, giving out mortgages not based on credit worthiness, very low interest rates - it's very easy to pay mortgages now, but when interest rates rise to just normal rates, people are going to find themselves underwater overnight, as evidenced in 2008.

[ilostmypassword]

Texas, of all places, has actually dealt effectively with this problem. And how did they do it? Government regulations. That's right. Evil government regulations that stifle the free market. You see, back in the 80's during the Savings & Loan crisis, Texas experienced a huge amount of mortgage default due to deregulation. After being bailed out, in effect, by most of the rest of the country, Texas instituted very strict controls on mortgages. Basically, you can't get a home loan unless you came up with 20% cash of the total cost of the home. No exotic mortgage plans allowed. The result, in the last wave of mortgage defaults, virtually no problem in Texas, home of the unbridled free markets. Funny how that works.

[GuestHouse]

I was recently visiting upstate NY, a visit I make at least once a year. The town I visit, like Mount Pleasant has the best schools in the district and consequently a magnet for wealthy families.

But I noticed a change the past two visits I've made. A town which had almost no apartments is not being changed to one in which family homes are now being divided, a floor offered for rent or being sold, the above article perhaps describes why that is happening. What is surprising is this is happening in what was until very recently solid, affluent middle-class territory.

Drive only ten or fifteen miles away from the towns along the Metro North lines and the picture changes dramatically to the worse. Whole ares of private homes have, again as the article points out, been transferred from private ownership to the rental market and the power house of the US economy, middle class consumer spending, has collapsed. The most conspicuous symptom of this is the lack of new cars on the road, whenever I took British visitors to this area 10 or so years ago they almost always remarked on the number of flash, new, high end cars being driven around. There are still a lot of flash high end cars, but very few new ones.

The whole area, and much of the American middle class, has an air of hanging on to past glory.

Fear not. There is wealth about and it is growing at break kneck speed. Take a drive through The Hamptons or Newport Rhode Island and you'll get an idea of where all the money is going.

And of course, always be wary of the game of cups, the bean is never where you thought it was. While we are being constantly told to worry about the next housing bubble, the real threat to the US, and as we have been so recently reminded, therefore to the whole global economy, is not a housing crisis or mis-sold mortgages.

The threat comes from a debt Americans as individuals cannot walk away from but which collectively is the biggest smouldering financial threat going, the totally unsecured education debt.

That one has yet to play its part, but rest assured it will show its ugly face into your savings, investments, job security and pension in the not too distant future.

[ilostmypassword]

I was recently visiting upstate NY, a visit I make at least once a year. The town I visit, like Mount Pleasant has the best schools in the district and consequently a magnet for wealthy families.

But I noticed a change the past two visits I've made. A town which had almost no apartments is not being changed to one in which family homes are now being divided, a floor offered for rent or being sold, the above article perhaps describes why that is happening. What is surprising is this is happening in what was until very recently solid, affluent middle-class territory.

Drive only ten or fifteen miles away from the towns along the Metro North lines and the picture changes dramatically to the worse. Whole ares of private homes have, again as the article points out, been transferred from private ownership to the rental market and the power house of the US economy, middle class consumer spending, has collapsed. The most conspicuous symptom of this is the lack of new cars on the road, whenever I took British visitors to this area 10 or so years ago they almost always remarked on the number of flash, new, high end cars being driven around. There are still a lot of flash high end cars, but very few new ones.

The whole area, and much of the American middle class, has an air of hanging on to past glory.

Fear not. There is wealth about and it is growing at break kneck speed. Take a drive through The Hamptons or Newport Rhode Island and you'll get an idea of where all the money is going.

And of course, always be wary of the game of cups, the bean is never where you thought it was. While we are being constantly told to worry about the next housing bubble, the real threat to the US, and as we have been so recently reminded, therefore to the whole global economy, is not a housing crisis or mis-sold mortgages.

The threat comes from a debt Americans as individuals cannot walk away from but which collectively is the biggest smouldering financial threat going, the totally unsecured education debt.

That one has yet to play its part, but rest assured it will show its ugly face into your savings, investments, job security and pension in the not too distant future.

And it's a problem that northern europeans including France virtually don't have since education costs are subsidized by the state. These countries recognize that investing in their citizens is the best investment the state can make.

[GuestHouse]

And it's a problem that northern europeans including France virtually don't have since education costs are subsidized by the state. These countries recognize that investing in their citizens is the best investment the state can make.

It's a problem the UK has imported.

But don't kid yourself that Northern Europeans are insulated from the inevitable financial fall-out when financial institutions eventually admit that the US educational debt is unsustainable.

[williamgeorgeallen]

the american dream slipping away. the people who caused the housing bubble were then given more money in the forms of bail outs. interest rates are now about as low as they can go. next stimulus spending by printing treasury notes to borrow money. just how much can you stimulate an economy? whole system is based on nothing but rich people playing a game of monopoly. they dont care about the stress poverty causes on families. all come down to greed.

[impulse]

Texas, of all places, has actually dealt effectively with this problem. And how did they do it? Government regulations. That's right. Evil government regulations that stifle the free market. You see, back in the 80's during the Savings & Loan crisis, Texas experienced a huge amount of mortgage default due to deregulation. After being bailed out, in effect, by most of the rest of the country, Texas instituted very strict controls on mortgages. Basically, you can't get a home loan unless you came up with 20% cash of the total cost of the home. No exotic mortgage plans allowed. The result, in the last wave of mortgage defaults, virtually no problem in Texas, home of the unbridled free markets. Funny how that works.

I paid 5% down when I bought mine in Texas- and that was well after the S&L debacle.

If you can come up with 20% down, you don't have to buy PMI- Private Mortgage Insurance, which saves a couple of points on the loan.

But make no mistake, you can buy a home in Texas with very little money down.

[Dustdevil]

I was recently visiting upstate NY, a visit I make at least once a year. The town I visit, like Mount Pleasant has the best schools in the district and consequently a magnet for wealthy families.

But I noticed a change the past two visits I've made. A town which had almost no apartments is not being changed to one in which family homes are now being divided, a floor offered for rent or being sold, the above article perhaps describes why that is happening. What is surprising is this is happening in what was until very recently solid, affluent middle-class territory.

Drive only ten or fifteen miles away from the towns along the Metro North lines and the picture changes dramatically to the worse. Whole ares of private homes have, again as the article points out, been transferred from private ownership to the rental market and the power house of the US economy, middle class consumer spending, has collapsed. The most conspicuous symptom of this is the lack of new cars on the road, whenever I took British visitors to this area 10 or so years ago they almost always remarked on the number of flash, new, high end cars being driven around. There are still a lot of flash high end cars, but very few new ones.

The whole area, and much of the American middle class, has an air of hanging on to past glory.

Fear not. There is wealth about and it is growing at break kneck speed. Take a drive through The Hamptons or Newport Rhode Island and you'll get an idea of where all the money is going.

And of course, always be wary of the game of cups, the bean is never where you thought it was. While we are being constantly told to worry about the next housing bubble, the real threat to the US, and as we have been so recently reminded, therefore to the whole global economy, is not a housing crisis or mis-sold mortgages.

The threat comes from a debt Americans as individuals cannot walk away from but which collectively is the biggest smouldering financial threat going, the totally unsecured education debt.

That one has yet to play its part, but rest assured it will show its ugly face into your savings, investments, job security and pension in the not too distant future.

And it's a problem that northern europeans including France virtually don't have since education costs are subsidized by the state. These countries recognize that investing in their citizens is the best investment the state can make.

But French universities are not impressive at all.

[williamgeorgeallen]

Texas, of all places, has actually dealt effectively with this problem. And how did they do it? Government regulations. That's right. Evil government regulations that stifle the free market. You see, back in the 80's during the Savings & Loan crisis, Texas experienced a huge amount of mortgage default due to deregulation. After being bailed out, in effect, by most of the rest of the country, Texas instituted very strict controls on mortgages. Basically, you can't get a home loan unless you came up with 20% cash of the total cost of the home. No exotic mortgage plans allowed. The result, in the last wave of mortgage defaults, virtually no problem in Texas, home of the unbridled free markets. Funny how that works.

I paid 5% down when I bought mine in Texas- and that was well after the S&L debacle.

If you can come up with 20% down, you don't have to buy PMI- Private Mortgage Insurance, which saves a couple of points on the loan.

But make no mistake, you can buy a home in Texas with very little money down.

same in new zealand. 20 percent downpayment on existing homes and 10 percent on new builds. if america followed same rules there would be far more owners and far fewer renter today. there have been something like 4 million homes foreclosed on since 2008. suicide rates show a significant increase. i heard there are more empty homes than there are homeless people in america but of course they can not afford to buy them. what a mess.

[Dumbastheycome]

Simple evidence of the master plan. Capitilism destroyed socialism. Corporatism is intended to overtake capitalism. Corporatism is the new face of Fascism . And the Neo Fascists intend to "own" the world.

[arjunadawn]

Another post-industrial pre-apocalyptic observation of Obama's America. This is what happens with when ideological blight infects the human crops.

Edited June 21, 2016 by arjunadawn

[NeverSure]

In a conversation this morning over coffee we we talking about how many items are NOT made in the US anymore. Not a single television set or computer for starters. We came up with lots of things very quickly. Most of them were invented in America and at one time manufacturing them created great jobs. Detroit is in ruins but it was once the auto manufacturing capital of the world and very prosperous.

Apple Computer has announced that it won't help support the Republican Convention this year. We couldn't help but wonder if it's because their shit is made in China and Trump has threatened them with bringing those jobs home. We don't know but they probably love the cheap labor???

We used to have tons of good paying family wage jobs in manufacturing but they are gone. Manufacturing creates New Wealth by transforming raw materials into a consumer product of value. We have to get back at it or we will fail.

Cheers.

[MaxYakov]

I was recently visiting upstate NY, a visit I make at least once a year. The town I visit, like Mount Pleasant has the best schools in the district and consequently a magnet for wealthy families.

But I noticed a change the past two visits I've made. A town which had almost no apartments is not being changed to one in which family homes are now being divided, a floor offered for rent or being sold, the above article perhaps describes why that is happening. What is surprising is this is happening in what was until very recently solid, affluent middle-class territory.

Drive only ten or fifteen miles away from the towns along the Metro North lines and the picture changes dramatically to the worse. Whole ares of private homes have, again as the article points out, been transferred from private ownership to the rental market and the power house of the US economy, middle class consumer spending, has collapsed. The most conspicuous symptom of this is the lack of new cars on the road, whenever I took British visitors to this area 10 or so years ago they almost always remarked on the number of flash, new, high end cars being driven around. There are still a lot of flash high end cars, but very few new ones.

The whole area, and much of the American middle class, has an air of hanging on to past glory.

Fear not. There is wealth about and it is growing at break kneck speed. Take a drive through The Hamptons or Newport Rhode Island and you'll get an idea of where all the money is going.

And of course, always be wary of the game of cups, the bean is never where you thought it was. While we are being constantly told to worry about the next housing bubble, the real threat to the US, and as we have been so recently reminded, therefore to the whole global economy, is not a housing crisis or mis-sold mortgages.

The threat comes from a debt Americans as individuals cannot walk away from but which collectively is the biggest smouldering financial threat going, the totally unsecured education debt.

That one has yet to play its part, but rest assured it will show its ugly face into your savings, investments, job security and pension in the not too distant future.

USA Student-loan Debt Clock - Market Watch (1.36 Trillion) and counting

USA National Debt Clock (19.285 Trillion) and counting even faster

You were saying something about a "smouldering [sic] financial threat"?

Edited June 21, 2016 by MaxYakov

[williamgeorgeallen]

I was recently visiting upstate NY, a visit I make at least once a year. The town I visit, like Mount Pleasant has the best schools in the district and consequently a magnet for wealthy families.

But I noticed a change the past two visits I've made. A town which had almost no apartments is not being changed to one in which family homes are now being divided, a floor offered for rent or being sold, the above article perhaps describes why that is happening. What is surprising is this is happening in what was until very recently solid, affluent middle-class territory.

Drive only ten or fifteen miles away from the towns along the Metro North lines and the picture changes dramatically to the worse. Whole ares of private homes have, again as the article points out, been transferred from private ownership to the rental market and the power house of the US economy, middle class consumer spending, has collapsed. The most conspicuous symptom of this is the lack of new cars on the road, whenever I took British visitors to this area 10 or so years ago they almost always remarked on the number of flash, new, high end cars being driven around. There are still a lot of flash high end cars, but very few new ones.

The whole area, and much of the American middle class, has an air of hanging on to past glory.

Fear not. There is wealth about and it is growing at break kneck speed. Take a drive through The Hamptons or Newport Rhode Island and you'll get an idea of where all the money is going.

And of course, always be wary of the game of cups, the bean is never where you thought it was. While we are being constantly told to worry about the next housing bubble, the real threat to the US, and as we have been so recently reminded, therefore to the whole global economy, is not a housing crisis or mis-sold mortgages.

The threat comes from a debt Americans as individuals cannot walk away from but which collectively is the biggest smouldering financial threat going, the totally unsecured education debt.

That one has yet to play its part, but rest assured it will show its ugly face into your savings, investments, job security and pension in the not too distant future.

great post and very interesting reading. friend of mine just got back from LA and was amazed at all the homeless sleeping under bridges. i wonder if america will continue to be a world power house with a small middle class. i can see civil unrest becoming more of a problem as people realize that it is harder to live the american dream. while the house hold debt cripples the individual the 19 trillion government debt cripples the nation. very hard to see a way out of this with the economy running on consumer spending which just fuels more debt.

Edited June 22, 2016 by williamgeorgeallen

[Buzzz]

In a conversation this morning over coffee we we talking about how many items are NOT made in the US anymore. Not a single television set or computer for starters. We came up with lots of things very quickly. Most of them were invented in America and at one time manufacturing them created great jobs. Detroit is in ruins but it was once the auto manufacturing capital of the world and very prosperous.

Apple Computer has announced that it won't help support the Republican Convention this year. We couldn't help but wonder if it's because their shit is made in China and Trump has threatened them with bringing those jobs home. We don't know but they probably love the cheap labor???

We used to have tons of good paying family wage jobs in manufacturing but they are gone. Manufacturing creates New Wealth by transforming raw materials into a consumer product of value. We have to get back at it or we will fail.

Cheers.

Actually, education in science, engineering and math are the engines of our future economy, not the stupid $1 dollar an hour jobs that are going offshore.

Soon, robots will be doing most of the manufacturing. The last few years, the Chinese FOXCONN company has replaced half its workers with robots.

Robotics are also bringing manufacturing to the USA.

Oh, and Computers are being manufactured in the USA.

https://youtu.be/IbWOQWw1wkM?t=20s

[Buzzz]

In a conversation this morning over coffee we we talking about how many items are NOT made in the US anymore. Not a single television set or computer for starters. We came up with lots of things very quickly. Most of them were invented in America and at one time manufacturing them created great jobs. Detroit is in ruins but it was once the auto manufacturing capital of the world and very prosperous.

Apple Computer has announced that it won't help support the Republican Convention this year. We couldn't help but wonder if it's because their shit is made in China and Trump has threatened them with bringing those jobs home. We don't know but they probably love the cheap labor???

We used to have tons of good paying family wage jobs in manufacturing but they are gone. Manufacturing creates New Wealth by transforming raw materials into a consumer product of value. We have to get back at it or we will fail.

Cheers.

Actually, education in science, engineering and math are the engines of our future economy, not the stupid $1 dollar an hour jobs that are going offshore.

Soon, robots will be doing most of the manufacturing. The last few years, the Chinese FOXCONN company has replaced half its workers with robots.

Robotics are also bringing manufacturing to the USA.

Oh, and Computers are being manufactured in the USA.

https://youtu.be/IbWOQWw1wkM?t=20s

[Buzzz]

In a conversation this morning over coffee we we talking about how many items are NOT made in the US anymore. Not a single television set or computer for starters. We came up with lots of things very quickly. Most of them were invented in America and at one time manufacturing them created great jobs. Detroit is in ruins but it was once the auto manufacturing capital of the world and very prosperous.

Apple Computer has announced that it won't help support the Republican Convention this year. We couldn't help but wonder if it's because their shit is made in China and Trump has threatened them with bringing those jobs home. We don't know but they probably love the cheap labor???

We used to have tons of good paying family wage jobs in manufacturing but they are gone. Manufacturing creates New Wealth by transforming raw materials into a consumer product of value. We have to get back at it or we will fail.

Cheers.

"In a conversation this morning over coffee we we talking about how many items are NOT made in the US anymore."

How is it that American exports are at an all time high?

Actually, education in science, engineering and math are the engines of our future economy, not the stupid $1 dollar an hour jobs that are going offshore.

Not sure why the Republicans are so anti education?

Soon, robots will be doing most of the manufacturing. The last few years, the Chinese FOXCONN company has replaced half its workers with robots.

Robotics are also bringing manufacturing to the USA. Then we ban robots, right?

But ooops, the handmade USA products won't be competitive so a trade war is the thing to do, right? Are you getting it?

Oh, and Computers are being manufactured in the USA.

https://youtu.be/IbWOQWw1wkM?t=20s

Edited June 22, 2016 by Buzzz

[Rancid]

Texas, of all places, has actually dealt effectively with this problem. And how did they do it? Government regulations. That's right. Evil government regulations that stifle the free market. You see, back in the 80's during the Savings & Loan crisis, Texas experienced a huge amount of mortgage default due to deregulation. After being bailed out, in effect, by most of the rest of the country, Texas instituted very strict controls on mortgages. Basically, you can't get a home loan unless you came up with 20% cash of the total cost of the home. No exotic mortgage plans allowed. The result, in the last wave of mortgage defaults, virtually no problem in Texas, home of the unbridled free markets. Funny how that works.

Where is the free market when the central banks lower interest to zero, people pile into housing as a way to try and get a return, housing bubbles are government generated. What we have in Texas is two governments with conflicting policies, hardly a triumph of statism.

Also look at Canada and Australia, both with government policy generated housing bubbles that won't end well, somewhat like playing musical chairs.

[spidermike007]

Aren't these programs, low rates and opportunities exactly what led to the last housing bubble?

Ultra-low mortgage rates have enabled Jim Phillips, 51, to capitalize on the influx, buying condos and renting them at a profit.

"With more and more younger people moving into the city, it's creating an opportunity for me," Phillips said. "So far, I have two condos. My goal is to buy, basically, one a year."

It reminds me of the scene from 'The Big Short' where the guy asks the stripper - 'How many homes do you own? The Wall Street Journal is reporting that the very same types of risky loans that got the US into the 2008 mess (Adjustable-rate Mortgages Make a Comeback') are rising in popularity again. The market is just duplicating the same mistakes, the programs to get poor people to own homes are still in place, giving out mortgages not based on credit worthiness, very low interest rates - it's very easy to pay mortgages now, but when interest rates rise to just normal rates, people are going to find themselves underwater overnight, as evidenced in 2008.

Correct. If anything the banks are far larger now, than before the crash. The next crash may be stunning, in it's depth and scope. The real estate market in the US is so overheated, at the moment, and the prices of small homes is staggering. The banks are getting more liberal, and the products they are offering are as high risk as ever. And nobody is reigning them in. Certainly not Obama. And certainly not Clinton, should she be elected. As for Trump, I do not even think he knows. He is just making it up as he goes along.

And yes, while it may becoming a renter nation, thousands are being forced into homelessness every month, due to the high rents. In areas like the west side of Los Angeles, 2 bedroom apartments are renting for $3,000 a month. Small 2 bedroom homes or $3,500 or more. And that is not a prime area like Santa Monica. We are talking West Los Angeles, Culver City, Mar Vista, etc.

Edited June 22, 2016 by spidermike007