Why Republicans did not do better during the November midterms is a subject of debate, but they should have considering the lousy state of the country under two years of Joe Biden and Democratic control of Congress.
In record time, it seems, our economy went from booming and growing under President Donald Trump to one saddled with historic inflation that saw record gas, food, energy, and commodities prices, not to mention huge losses in savings for Americans as a tanking stock market wiped away trillions of dollars in value in 401(k) retirement accounts.
But at the same time that prices for just about everything were rising, the value of what is the single most significant investment for most Americans -- their homes -- has fallen to the lowest levels since World War II, thanks to actions the Federal Reserve was forced to take in response to the inflationary economy Biden and his Democratic congressional majority created.
The only way the Fed has to dampen inflation is to dampen demand, and the only way to dampen demand is to make it more expensive to borrow money. The Fed has done that by raising interest rates to their highest levels in decades, making it very expensive to finance big-ticket items like cars and homes. Consequently, car and home sales have tanked and while automobile prices remain artificially high, home prices/values have fallen significantly, as reported this week by Breitbart News:
The American housing market is suffering its second-largest price correction since the end of WWII, and one expert attributed it partly to people’s concerns about economic issues.
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According to founding partner of Macro Trends Advisors Mitch Roschelle, the correction was due to citizens’ uncertainty and concern about the economy.
“A couple of things are going to cause it to turn in the opposite direction, meaning home prices are going up. One is certainty. And when you don’t know if interest rates are going to go up or not. I think that is what is driving a lot of people away from buying because they just don’t know if rates are going to be cheaper in two months, and they’re just going to wait,” Roschelle told FOX Business’ Ashley Webster.
“And the other thing is uneasiness regarding the economy. And I think the shoe to drop there would be if we start seeing layoffs, and we start seeing unemployment starting to rise, I think that could be something that causes a leg down in the housing market in a big way," Roschelle added.
By September, home prices had fallen for the third straight month.
Roschelle said that even though home prices are falling, that doesn't necessarily mean it's a buyer's market right now -- only that prices are likely to be less than they were a year ago.
“So, if there’s a house that hits the market that’s perfect, and it ticks all the boxes for buyers and there are buyers out in the market, I think you could see sporadically bidding wars, but mostly, you know, it’s one or two people chasing that house. And we’re not seeing that. We’re not," he added.
Meanwhile, the trend of major corporations buying up vacant homes is likely to accelerate with prices falling. Firms are hoping to capitalize on a growing rental market, with rents rising throughout the country as fewer Americans seek to buy their own homes. Also, many of the same companies are likely betting that home prices will rise again so they'll be able to sell off those homes at a larger profit.
Either way, all of this market instability in the housing industry has been directly caused by Democratic policies and massive Democrat-passed spending bills, which created an inflationary economy where one did not exist under Trump.
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