The Housing Boom Continues

The Mortgage Corner

Calculated Risk

Total existing-home sales, https://www.nar.realtor/existing-home-sales, including single-family homes, townhomes, condominiums and co-ops, rose 9.4 percent from August to a seasonally-adjusted annual rate of 6.54 million in September.

The housing boom continues in the middle of the coronavirus pandemic. Overall home sales are up 20.9 percent from a year ago (5.41 million in September 2019).

“Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season,” said Lawrence Yun, NAR’s chief economist. “I would attribute this jump to record-low interest rates and an abundance of buyers in the marketplace, including buyers of vacation homes given the greater flexibility to work from home.”

That is one of the reasons for the surge—more well-healed, white collar buyers are working from home as the pandemic has accelerated the digital revolution, and a central work location is no longer needed.

Couple this with the upcoming 5G networks that will power more of everything—manufacturing, services, and online education, for starters. The World Economic Forum described what is possible with the wider band widths and faster speeds that 5G will bring to economic growth.

“Think about a world in which not just people but all things are connected: cars to the roads they are on; doctors to the personal medical devices of their patients; augmented reality available to help people shop and learn and explore wherever they are. This requires a massive increase in the level of connectivity.”  

And it is exacerbating the existing housing shortage.  Builders are playing catch up to this speeding up of the surge in demand.

Total housing inventory at the end of September totaled just 1.47 million units, down 1.3 percent from August and down 19.2 percent from one year ago (1.82 million). Unsold inventory sits at a 2.7-month supply at the current sales pace, down from 3.0 months in August and down from the more normal 4.0-month figure recorded in September 2019.

Builders are responding.  U.S. single-family homebuilding raced to a more than 13-year high in September. The report from the Commerce Department showed single-family homebuilding jumped 8.5 percent to a seasonally adjusted annual rate of 1.108 million units last month. That offset a 16.3 percent decline in starts for the volatile multi-family segment to a pace of 307,000 units, said the National Association of Homebuilders (NAHB). Overall, housing starts increased 1.9 percent to a rate of 1.415 million units last month.

Homebuilding has advanced 11.1 percent year-on-year, with single-family starts surging 22.3 percent. Further gains in single-family home construction are likely, said Reuters, with building permits shooting up 7.8 percent to a rate of 1.119 million units last month, the highest level since March 2007

Scarce inventory has been problematic for the past few years, according to Yun, an issue he says has worsened in the past month due to the dramatic surge in lumber prices and the dearth of lumber resulting from California wildfires.

Mortgage rates are helping to offset some of those high home prices, however. A 30-year conforming fixed-rate mortgage dropped to 3 percent in August and has averaged below 3 percent in the past few weeks, the lowest on record.

I said last week that the NAR also reports pending home sales for contracts closing in some two months are also surging, which will boost sales through the end of the year. Pending home sales in August continued to move upward, marking four uninterrupted months of positive contract activity. Each of the four major regions have experienced growth in month-over-month and year-over-year pending home sales transactions.

Harlan Green © 2020

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The Winter Pandemic is Coming

Financial FAQs

COVIDTrackingProject

There is little doubt that this fall and winter will show a surge in pandemic illnesses and deaths. States in the Midwest and South will hurt the most, but also some northern states like Montana, North and South Dakota that don’t have statewide mask-wearing requirements.

At least 793 new coronavirus deaths and 65,327 new cases were reported in the United States on Oct. 15. Over the past week, there has been an average of 54,399 cases per day, an increase of 25 percent from the average two weeks earlier.

And this is just at the start of the flu season. As of Friday afternoon, more than 8,036,100 people in the United States had been infected with the coronavirus and at least 217,800 have died, according to a New York Times database.

Who is listening as the holidays approach? Dr. Fauci has warned that “This is an outbreak of historic proportions, the likes of which we have not seen in 102 years,” he said, referencing the 1918 flu. Death rates are actually increasing in 23 of those states at this writing.

Just look at the numbers. There are now 40 states with increasing infection rates, and 22 states with increasing death rates. North and South Dakota, Kansas, Montana and Alabama are the deadliest states, according to John Hopkins.

Calculated Risk

There were 913,976 test administered this Friday, and a positivity rate rising above 5 percent again; anything above that infection rate is not considered controllable by epidemiologists. So what does this pandemic surge mean for economic growth?

We will be looking in the rear-view mirror with the upcoming Q3 GDP forecasts that predict on average a 35 percent GDP growth that could fool US into thinking the pandemic-induced recession has ended. A 35 percent annualized increase in Q3 GDP is about 7.8 percent QoQ, and would still leave real GDP down about 3.3 percent from last year’s Q4.

The Q3 growth surge is partly due to a huge and probably temporary jump in retail sales, up 1.9 percent from August to September (seasonally adjusted), and were up 5.4 percent from September 2019.

So what should be done? Harvard Professors Larry Summers and David Cutler predict a much worst outcome if more pandemic relief isn’t passed this year.

They have just published a study in The Journal of the American Medical Association that says the total cost of the pandemic is estimated at more than $16 trillion, or approximately 90 percent of the annual gross domestic product of the US by the fall of 2021 when the pandemic is predicted to have subsided. Approximately half of this amount is the lost income from the COVID-19–induced recession; the remainder is the economic effects of shorter and less healthy life.

“However, increased investment in testing and contact tracing (approx. $100m) could have economic benefits that are at least 30 times greater than the estimated costs of the investment in these approaches,” they said.

Professor Summers said in a recent Sunday Fareed Zakaria CNN interview that the total cost of the pandemic — including more than 10 weeks of near total lockdown across most of the country, which caused the GDP in second quarter to drop by more than a third — will eclipse the money the U.S. has spent on every war since September 11, 2001, including those in Afghanistan, Iraq and Syria.

Now is the time, they say, to borrow more when the cost of money is so cheap—at almost zero interest—to start the projects that will bring down the pandemic infection rates and bring back longer-term growth and prevent the enormous wastage in life and property that present inaction is costing Americans.

There is really no alternative, or we will end up approaching the horrific 1918 Spanish flu death count when we were much less prepared.

Harlan Green © 2020

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Back to a ‘V’-Shaped Recovery?

Popular Economics Weekly

FREDcontinuedclaims

Richard Clarida, No.2 official at the Federal Reserve said on Wednesday that the U.S. recession begun in March with the coronavirus pandemic may already be over.

“This recession was by far the deepest one in postwar history but it also may go into the record books as the briefest recession in U.S. history,” Clarida said in prepared remarks to an Institute for International Finance conference. The flow of economic data since May has been “surprisingly strong,” he said.

Why? There is much pent up consumer demand with a record personal savings rate double (approximately 14 percent) what it was pre-pandemic because of the March to June economic shutdown when they couldn’t spend on anything but essentials.

Meanwhile, initial jobless claims remained worryingly high in the week of October 10.  The seasonally adjusted level of state claims rebounded by 53K to 898K, which is the highest reading since the first half of August, said Reuters’ Wrightson/ICAP data service.  In not seasonally adjusted terms, claims were up 76K, with the increase spread across a range of states:  Indiana was up 19K, Illinois and Massachusetts were each up 10K, Georgia was up 8K, for instance. 

The pace of new layoffs continues to be a source of concern.  “We continue to think it is an open question whether there will be enough new hires and worker call-backs in October to offset the ongoing job losses,” said ICAP.  “The string of positive payroll gains could be interrupted this month.”

FREDunemployment

October’s unemployment report won’t be released until Friday after the November election. September’s unemployment rate fell to 7.9 percent from 8.4 percent in August.

In the continuing claims data, workers continued to fall off the state rolls in the week of October 3 as they exhausted their regular benefits.  The number of beneficiaries slid 1.2 million in seasonally adjusted terms to a level of 10.0 million still collecting some form of unemployment benefits. 

Economists’ consensus is that the economy should rebound at a 31.9 percent annualized rate in the July-September quarter. The economy sank at a record minus -31.4 percent rate in the second quarter.

The Fed vice chairman was not all upbeat though. He said the outlook for the economy was unusually uncertain and depends on the course of the virus. It will take time for the economy to recover all the lost ground in the recession and he said more help from Fed policy and Congressional spending “will be needed.”

I believe a full recovery in the consumer-dependent service sector probably won’t happen until next summer, at least, once a reliable vaccine is developed and widely distributed.

Harlan Green © 2020

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Booming Home Sales Create Housing Shortage

The Mortgage Corner

Booming Realtors’ existing-home sales are showing there is a very severe housing shortage with record sales and a record low housing inventory. Santa Barbara Realtor Jim Witmer said the demand for Santa Barbara homes is huge and inventory is being held back by seller’s concerns about the virus.  Buyers are making decisions based on spending more time at home, with work space and more amenities. 

“This trend continues as more people relocate to the safety and lifestyle offered by Santa Barbara.  This should continue to drive our values up.  The supply is limited and it is a good time to be a seller,” said Witmer.

Inventory levels are at record lows, with just 228 homes listed for sale in the MLS in September, down 22 percent from January.

The NAR reports that housing affordability declined in August compared to a year ago, despite median incomes rising. However, the jump in home prices—up 11.7 percent—was way above family income increases of 2.2 percent. August 2019).

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” said Lawrence Yun, NAR’s chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”

Forbes

Total housing inventory at the end of August totaled 1.49 million units, down 0.7 percent from July and down 18.6 percent from one year ago (1.83 million). Unsold inventory sits at a 3.0-month supply at the current sales pace, down from 3.1 months in July and down from the 4.0-month figure recorded in August 2019.

Scarce inventory has been problematic for the past few years, according to Yun, an issue he says has worsened in the past month due to the dramatic surge in lumber prices and the dearth of lumber resulting from California wildfires.

Mortgage rates are helping to offset some of those high home prices, however. A 30-year fixed-rate mortgage dropped to 3 percent in August and has averaged below 3% in the past few weeks, the lowest on record.

The NAR also reports pending home sales for contracts closing in some two months are also surging, which will boost sales through the end of the year. Pending home sales in August continued to move upward, marking four uninterrupted months of positive contract activity. Each of the four major regions experienced growth in month-over-month and year-over-year pending home sales transactions.

The Pending Home Sales Index (PHSI),* www.nar.realtor/pending-home-sales, a forward-looking indicator of home sales based on contract signings, rose 8.8 percent to 132.8 – a record high – in August. Year-over-year, contract signings rose 24.2 percent.

The sale pendings reported by Santa Barbara MLS are again much higher than the previous year (50 percent), so we can expect October to also be a big month for sales, said Witmer.

Harlan Green © 2020

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Is the Age of Narcissism About to End?

Answering the Kennedys’ Call

ATHENS, GREECE – OCTOBER 07: Anti-fascist protesters outside the court, where the trial of leaders and members of the Golden Dawn far-right party is taking place on October 7, 2020 in Athens, Greece. After a five-year trial, a Greek court found the Golden Dawn leader Nikos Michaloliakos and six associates guilty of running a criminal group. A supporter, Giorgos Roupakias, was found guilty of murder and 15 others were convicted of conspiracy. The neo-Nazi party won 18 MP seats in 2012 as the country grappled with a financial crisis. (Photo by Milos Bicanski/Getty Images)

Are we nearing the end of what historians and psychologists have called the Age of Narcissism, an era that has spawned populist governments and closed borders, the breakup of traditional families and communities, and the election of Donald Trump?

The Greeks may once again be an example for western liberal democracy after a multi-year struggle to reject their own neo-fascist autocracy that attempted to capitalize on this modern age of discontent.

Foreign Policy Magazine reports that the leaders of Greece’s Golden Dawn political party were found guilty on Wednesday of a range of criminal activity, including using the party as cover to run a criminal organization.

“The ruling followed a trial that lasted five-and-a-half years. Several dozen party members and associates, including 18 former lawmakers and party leader Nikos Michaloliakos, were found guilty on a variety of charges, including murder, attempted murder, assault, and possession of weapons.”

Does this sound familiar? The FBI and Michigan’s State Police just arrested 13 members of two neo-fascist Michigan militia groups for plotting to kidnap Michigan’s Governor Gretchen Witmer and try her for treason, after their plan for an armed occupation of its state capital fell through.

This is while President Trump has refused to disavow white supremacist violence as well as autocratic foreign leaders for their abuse of human rights.

Trump is the man that has been diagnosed by multiple mental health professionals with a Narcissistic Personality Disorder (NPD), “using other people as instruments of gratification even while craving their love and approval,” in the words of social historian Christopher Lasch.

While suffering from COVID-19, Trump has held several coronavirus super-spreader campaign events that infected some 34 supporters, Senators, and White House staff with COVID-19 to date; showing no concern for their health and safety.

Christopher Lasch was perhaps the first to broach the subject in various critiques of modern American society. This included his 1979 best-seller, The Culture of Narcissism: American Life in an Age of Diminishing Expectations that took “what was still mainly a narrow clinical term and used it to diagnose a pathology that seemed to have spread to all corners of American life,” per a recent NY Times summary of his book.

Lasch saw this as a societal pathology that took individualism to its destructive extreme of ‘me first’ over any concern for others with the breakup of communities and headlong rush to a post-WWII, consumer-driven economy. The extended family was transformed into the nuclear family of a married couple with children; grandparents migrating to senior living centers; as the growing middle class moved to the suburbs and away from traditional family and community values.

“In Lasch’s definition (drawn from Freud), the narcissist, driven by repressed rage and self-hatred, escapes into a grandiose self-conception, using other people as instruments of gratification even while craving their love and approval,” said the review. “Lasch saw the echo of such qualities in “the fascination with fame and celebrity, the fear of competition, the inability to suspend disbelief, the shallowness and transitory quality of persulture of onal relations, the horror of death.”

I contend that Greece’s example may be the first sign of the demise of the culture of narcissism, and it white supremacist, neo-fascist roots that has spawned so-called populist governments in Hungary, UK’s Brexit, and Presidents for life in Turkey and Russian.

We are now seeing its demise in the return to traditional households within the American populace where families are once again coming together. NY Times’ Timothy Egan wrote a wonderful Op-ed on his yearning for the extended family that he saw returning in the face of the coronavirus pandemic.

The PEW Research Center reported that 64 million Americans were living in multigenerational households—the highest number on record, and an increase of almost 70 percent from 1980. Last year, for the first time in 100 years, the average number of people in the American household started going up instead of down, to 2.63 people per unit, Egan reported.

The Age of Narcissism was probably a historical anomaly anyway, which probably began its demise before the pandemic as millennials remained stuck in their parents’ home during the Great Recession because of the lack of jobs due to Wall Street’s failure. It’s really an indictment of what our narcissistic culture has spawned since the 1970s—a modern, self-interested capitalism that enshrined “greed is good” and maximization of profits as the sole responsibility of modern corporations.

Tens of thousands of people gathered outside the courthouse to await the verdict of Greece’s Golden Dawn trial, reported Foreign Policy. When the news came, the crowds erupted in applause and cheers. “The mood here today is resonant of the celebrations we saw with the liberation of Athens from the Nazis. It’s a great day,” said Petros Constantinou, a leading anti-racism activist.

Harlan Green © 2020

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Do We Want Another Great Recession?

Financial FAQs

MarketWatch

Federal Reserve Chair Jerome Powell has warned of “tragic’ economic risks if another coronavirus aid package isn’t passed by congress. This is while President Trump has just said that talks over additional aid will be suspended until after the election in order that the Senate has the time left to take up Judge Amy Barrett’s Supreme Court nomination.

“Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy and holding back wage growth,” Powell said. “By contrast, the risks of overdoing it seem, for now, to be smaller.”

Employment of those in the bottom rung of the wage distribution scale remains 21 percent below its February level, while it was only 4 percent lower for workers who receive higher wages, the Fed chairman said.

It seems that Republicans have painted themselves into a corner if they expect to profit from an economy sure to get worse without another aid package before the election. Why are they writing off their chances on November 3rd with an economy sure to slow again? Your guess is as good as mine.

MarketWatch’s chart above highlights the problem. The top 10 percent of household income-earners now corral 51.9 percent of Americans’ aggregate income. That includes stocks as well as real estate and other investments by ‘rentiers’—those living off their assets, rather than the wages and salaries of most workers.

Out middle-income households now garner just 14.1 percent of household income, whereas it was closer to 20 percent in the 1960s and 1970s, before the cutting of taxes and deregulation of whole industries gave corporations the license to maximize their profits, rather than the welfare of their employees.

The predictions of future growth are dire without additional aid to households as well as certain industries his hardest by the pandemic shutdowns.

The NY Times Neil Irwin summarized best what is likely to happen without additional aid. “Business news headlines are reflecting a drumbeat of layoffs normally seen in recessions. In the last few weeks alone, oil giant Shell said it was cutting 9,000 positions, with Disney eliminating 28,000 and defense giant Raytheon 15,000.

“After shedding jobs in the spring, these sectors have brought workers back slowly, or not at all, through the summer. Some have continued cutting positions. Employment at corporate headquarters — “management of companies and enterprises,” in the official terminology — fell by 92,000 in March and April, with another 4,000 jobs lost since.”

He quotes Sophia Koropeckyj, an economist at Moody’s Analytics, who said we do expect there to be a new steady state, but not until 2023 or 2024,” In a new report, she estimates that 5 million people will find it difficult to get new work after the pandemic because their old jobs have disappeared or changed significantly. “I don’t think the severity of this downturn has been well understood yet given the bounce-back over the summer.”

Nobel-winning economist Paul Krugman has been saying what is obvious. Without additional government aid, we could sink into another Great Recession.

“The lesson I take is that our political dysfunction is even worse, our ability to rise to the occasion even lower, than I imagined. It’s hard to look at what’s happening now without feeling a sense of despair.”

Let us see what happens over the next few weeks. Few economists see good times ahead unless the 80 percent of households that earn wages and salaries; many are the essential workers that have a difficult time meeting even their living expenses; aren’t given additional aid.

Harlan Green © 2020

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Unemployment Declines, Modest Hiring

Popular Economics Weekly

MarketWatch

The economy regained 661,000 jobs in September and the unemployment rate fell for the fifth month in a row to 7.9 percent, the government said Friday. It’s the smallest advance since a recovery began in May, with August revised upward to 1.49 million new payroll jobs. Private-sector payrolls rose by a stronger 877,000. A-219,000 decline in government employment reduced the overall number, mainly in state and local education.

Bars and restaurants added the most jobs in September (200,000), followed by retail, health care and white-collar businesses. Workers also put in more hours on the job, another good sign for the labor market. So far the U.S. has recovered about 11.4 million jobs since a recovery got underway in May. The economy had shed about 23 million jobs at the height of the pandemic.

We have to worry about the upcoming fall and winter COVID seasons, however, to know if employment and economic growth will continue. Consumers are more optimistic about their future with the Conference Board’s consumer confidence survey also showing increased optimism.

ConferenceBoard

“Consumer Confidence increased sharply in September, after back-to-back monthly declines, but remains below pre-pandemic levels,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “A more favorable view of current business and labor market conditions, coupled with renewed optimism about the short-term outlook, helped spur this month’s rebound in confidence. Consumers also expressed greater optimism about their short-term financial prospects, which may help keep spending from slowing further in the months ahead.”

Consumer spending also increased 1 percent, a good number, but before the latest announced layoffs by airlines and other large employers. This is happening in part because congress can’t agree on another relief package, though the Democrat-led House just passed a $2.2 trillion aid bill. No word yet on what the Republican-led Senate is doing, however.

The NY Times reports that Disney, Allstate Insurance and several airlines have announced some 60,000 job cuts or furloughs with more to follow if congress can’t get its act together on more aid.

The last estimate of Q2 GDP was barely changed, contracting at -31.4 percent vs. -31.7 percent in the second estimate, and it looks like the upcoming first estimate of third quarter GDP growth will be positive, maybe ending the pandemic-induced recession, as I said yesterday.

The employment numbers do not look to be trending in the right direction, especially with the -2.7 percent decline in personal income reported by the Commerce Department for August that is due to the ending of the $600 percent week unemployment stipend in July. Consumer spending is two-thirds of economic activity these days, so I see further headwinds ahead as we navigate the COVID-19 pandemic.

Harlan Green © 2020

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No Surprises in Q2 GDP. ADP Employment

Financial FAQs

FREDGDP

The last estimate of Q2 GDP was barely changed, contracting at -31.4 percent vs. -31.7 percent in the second estimate, but that isn’t dampening the stock market, as it looks like the upcoming first estimate of third quarter GDP growth will be positive, maybe ending the pandemic-induced recession.

Tomorrow’s ‘official’ Labor Department unemployment report should tell us more about third quarter growth, with the first Q3 estimate coming out at the end of October..

Why the consumers’ optimism, just as Covid-19 infection rates are beginning to rise again? Americans’ spending rose 1 percent in August for the fourth month in a row, stemming largely from the massive infusion of federal aid for the unemployed, and the reopening of more businesses. But the increase was the smallest since the U.S. reopened and pointed to a slower economic recovery.

Incomes had declined by 2.7 percent because of the end of government aid in July, the biggest drop since early in the pandemic, but spending is still positive due to accumulated savings from the lockdowns. The personal savings of 14.1 percent is still almost twice as high as it was before the pandemic.

ADP

And ADP reported on Wednesday that 749,000 private nonfarm payroll jobs were created in September, with most of the jobs in midsize (259k) and large (297k) companies. It is probably a sign that Friday’s Labor Department unemployment report will show at least 1 million new private payroll jobs being created as well.

Another positive growth sign was that initial jobless claims filed through state programs dropped to 837,000 in the week ended Sept. 26 from a revised 873,000 in the prior week, the Labor Department said Thursday.

And an estimated 650,120 people also filed new claims under the Pandemic Unemployment Assistance Act, the federal law that temporarily made self-employed workers eligible for benefits for the first time ever. That put the number of actual or unadjusted new claims at 1.49 million.

So more workers are returning to their workplace, but the question will be still whether the continuing job creation trend remains positive, given that the fall and winter pandemic/flu season is just beginning.

Harlan Green © 2020

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Why the Housing Shortage?

The Mortgage Corner

Calculated Risk

Booming Realtors’ existing-home sales are showing there is a very severe housing shortage with record sales and a record low housing inventory. Calculated Risk says the for-sale inventory is was down 18.6 percent year-over-year (YoY) in August. This is the lowest level of inventory for August since at least the early 1990s.

Forbes

Sales continued to climb in August, marking three consecutive months of positive sales gains, according to the National Association of Realtors®. Total existing-home sales, https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 2.4 percent from July to a seasonally-adjusted annual rate of 6.00 million in August. Sales are up 10.5 percent from a year ago (5.43 million in August 2019).

Reuters said recently, “With single-family building permits extending their uptrend in August, we think new home sales may continue to improve as well.  We do think any further gain in August is likely to be much more modest, and our point estimate calls for an increase of about 2 percent, to an annual rate of 920K.  That would represent a YOY increase of 30 percent, the highest monthly reading since the end of 2006. The YOY increase increase in the median price of a new home stood at 7.2 percent in July, also a new high.

And new-home sales are also booming while builders struggle to catch up to the higher demand. New home sales jumped 14 percent in July to a nearly 14-year high.  It was the third consecutive monthly increase of that magnitude or larger. Can this last?

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” said Lawrence Yun, NAR’s chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3 percent and with continued job recovery.”

What is going on? We know the incredibly low interest rates are a factor. Also the Great Recession caused builders to literally stop building because of so much excess inventory frpom the busted housing bubble (foreclosures, etc.).

Housing construction actually fell some 80 percent over the past 10 years since the end of the Great Recession, and hasn’t yet caught up. We also have the Covid-19 pandemic that has temporarily reduced new household formation. The Federal Reserve said in a research note that from February to June, “This decline is of essentially the same magnitude as that seen over the entire Great Recession, and it corresponds to a drop in the number of occupied housing units—or an increase in the number of vacant units—of roughly 2 million.”

But that hasn’t slowed population growth. Forbes Magazine in a recent article said, “Scarred by the housing bust, homebuilders have been sitting on their hands for the past decade. Census Bureau data shows an average of 1.5 million homes were built each year since 1959. Yet over the past decade, just 900,000 homes have been built per year.”

What can we do? It can’t just be up to local governments with exclusionary zoning restrictions that NIMBYs use to restrict affordable housing in their neighborhoods.

In the 1980s, Congress established the Low Income Housing Tax Credit program to incentivize private developers to build affordable apartment homes and communities, reports USA Today. More than 3 million affordable units have been built under the program, and if Congress were to expand this program — as proposed in new bipartisan legislation (Affordable Housing Credit Improvement Act of 2019) — experts estimate that our country could create or preserve an additional 384,500 affordable homes over the next 10 years.

There is much more that can be done on the national level. Record income inequality has made home ownership much less affordable for Main Streeters. There has been no movement to cure the problem, such as a national minimum, or to strengthen labor laws that would boost the income of working families.

There has to be a concerted national effort so reverse this trend, in other words, or the homeless numbers will continue to rise in everyone’s backyard.

Harlan Green © 2020

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The Costs of an Extended Covid-19 Pandemic

Popular Economics Weekly

COVID Tracking Project

I have been asked many times about my thoughts on the direction of our fall and winter economies, but been hesitant to give specific answers because firstly, it depends on the November election.

Republican economics have been a disaster, from the multiple trade wars that shrank world trade, even before the coronavirus pandemic did further harm, and the 2017 corporate tax cuts that haven’t fulfilled any of their promises, just given corporations the excess profits to overinflate stock and bond prices while adding $trillions to the national debt.

And secondly, it depends on the pandemic’s outcome, which also depends on the November election, since Trump and his red state Republicans now actively oppose almost all scientific remedies for bringing down the infection and death rates—such as a national mask mandate—in their haste to open the economy before November.

We are now beginning to have a reckoning of the stunning disregard for human life by the Trump administration and Republican Party as we enter the fall season of colder weather when viruses thrive and the COVID-19 deaths in the U.S. have now reached 200,000.

Calculated Risk

The Covid Tracking Project reports that more than 40,000 Americans per day are now infected with the virus, up from 20,000 at its low point in June, as virus testing has risen to almost one million per day with newly available testing procedures.

So the question has to be why such a stunning disregard for the well-being of Americans during the worst natural disaster to hit the world since the 1918 Spanish influenza pandemic, and which now has killed more Americans (200,000) than all the world wars of the past century?

Top that with Trump administration attempts to have the Supreme Court repeal Obamacare that protects Americans with existing illnesses, which would affect more than 20 million Americans’ healthcare, thus allowing insurance companies to once again deny treatment for any after effects of COVID-19 illnesses that would be deemed a pre-existing condition.

Meanwhile, President Donald Trump last week contradicted comments made by his administration’s health experts regarding the timing of when a vaccine might be available, and the Centers for Disease Control and Prevention had to reverse course on new testing guidelines after the New York Times reported that the new guidelines were actually written by the Trump administration and not CDC scientists.

“I wanted to always play it down,” Trump told Bob Woodward in his new book, Rage, on March 19, even as he had declared a national emergency over the virus days earlier. “I still like playing it down, because I don’t want to create a panic.”

If instead of playing down what he knew, Trump had acted decisively in early February with a strict shutdown and a consistent message to wear masks, social distance and wash hands, experts believe that thousands of American lives could have been saved, maybe preventing an inevitable repeat of the 1918 horrors that should never be repeated.

The direction of our economy and who it benefits really boils down to the results of the November election, unfortunately. The most egregious cost to Americans has been the needless suffering caused by Republicans’ support of President Trump’s policies.

He has become the “useful idiot” also threatening our national security interests, in the words of Lt. Colonel Alexander Vindman, a decorated Marine veteran and former National Security Council analyst and Russian specialist, who is willing to parrot any message that will keep him in power

The populist counterrevolution espoused by the Trump Party has so weakened American values and institutions that actual law-breaking is now considered a new normal, race-baiting and the scapegoating of minorities official government policies.

These costs are no longer bearable, in part because I and many economist see very dark days ahead until and unless the Republican Party is forced to change its ways, and why would that happen unless they are prevented from causing further harm this November?

Harlan Green © 2020

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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