7 In 10 Americans Believe The Crisis Is Not Over Or Worst Is Yet To Come: 52% Can't Afford Their Homes

Tyler Durden's picture

For all the talk about a recovery, pundits, especially those who peddle expensive newsletters, continue to forget one key distinction of the New Normal: there are those for whom the recovery has never been stronger, well under 10% of the population, i.e., the already wealthy whose net worth is allocated in financial assets. And then there is everyone else, that vast majority of Americans, who not only have not benefited by the Fed's relentless balance sheet expansion and accompanying asset reflation but whose incomes just posted the first decline in real terms since 2012.

It is this latter segment that should be concerned by a recent survey conducted by the MacArthur Foundation titled "How Housing Matters".

According to the survey during the past three years, over half of all U.S. adults (52%) have had to make at least one sacrifice in order to cover their rent or mortgage. Such sacrifices included getting an additional job, deferring saving for retirement, cutting back on health care and healthy foods, running up credit card debt, or moving to a less safe neighborhood or one with worse schools.

More disturbing, the survey also found that while there are some indicators that the American public’s views about the housing crisis are shifting toward the positive, large proportions of the public are not feeling the relief: seven in 10 (70%) believe we are still in the middle of the crisis or that the worst is yet to come. 


And no, it is not just the high school graduates who are desperate: a whopping 60% of college grads agree: the worst is yet to come (perhaps after looking at their student loan balances).

Some more facts.

As MarketWatch reports, "although mortgage rates are still quite low, down payments, poor credit and tighter lending standards remain three of the biggest hurdles for buying a home, especially among young people, Blomquist says. “The slow jobs recovery for young adults has made it harder for them to save and to get a mortgage.” Some 84% of young people are delaying major life decisions due to the poor economy, according to a 2013 survey by Generation Opportunity, a nonprofit think tank based in Arlington, Va."

What’s more, at least 15% of American homeowners (or residents of 78 counties across the country) were living in housing markets where the monthly mortgage payment on a median-priced home requires more than 30% of the monthly median household income — long considered the maximum for rent/mortgage repayments. Housing costs above that threshold are “unaffordable by historic standards,” says Daren Blomquist, vice president at real estate data firm RealtyTrac. In New York county/Manhattan, mortgage payments represent 77% of the median income and in San Francisco County represents 70%.

As a result of a broken economy and lack of good job opportunities the "American dream" is now on its last legs: more than half of Americans, or 54%, believe that buying a home has become less appealing than it once was while some 43% of respondents have indicated that it is no longer the case that owning a home is “an excellent long-term investment and one of the best ways for people to build wealth and assets." Even as seven in 10 renters (70%) aspire to owning a home, high proportions (58%) believe that “renters can be just as successful as owners at achieving the American Dream.”

Why not: as long as one is able to delude themselves that renting the American Dream is "good enough."

And the biggest disconnect between the abovementioned pundits, all of whom most likely have lucrative jobs that pay 6 or 7 figure incomes: while economists and housing experts say the housing crisis is behind us, large proportions of the American people are not feeling the relief.  Very high proportions of the public (70%) continue to believe that we are still in the midst of the housing crisis (51%) or that the worst is yet to come (19%). Only 25% believe “the housing crisis is pretty much over.” The public in 2014 is only slightly more optimistic than it was one year ago, when 77% believed we were still in the middle of the crisis or that the worst was yet to come.  More than two in five adults (42%) believe the housing market today continues to be a serious problem.

The biggest irony is that for most, the biggest culprit for the current economic fiasco, the US government, is the only entity that can help in the existing economic predicament:

Americans believe that government can and should be doing more to improve housing affordability for both renters and owners. Indeed, most do not think that either homeownership or renting should take priority. Rather, solid majorities want the federal government to invest in both equally.

Stupidity aside, we hope that this clarifies the perpetually nagging question: why is there is no retail participation in this Fed-engineered, centrally-planned rally. The simple answer: people just don't have the disposable income to chase stocks at record highs. The not so simple answer: people's faith in US capital markets, just like their economic well-being, is slowly being eroded at the expense of the wealthiest 1% of US society, which, as Piketty correctly observes (if incorrectly diagnoses ways to fix) has never been richer.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
COSMOS's picture

Yes Ukraine type govt action coming soon to USA.  Bundy was just a close call.  Things will get worse for sure especially when all the dollars come back flooding in from around the world.

wee-weed up's picture

Hope and Change! O-ba-ma... O-ba-ma... O-ba-ma...

outamyeffinway's picture

'Splains why the market's breaking records...

max2205's picture

100% of the FSA says it was over 5 years ago

Say What Again's picture

The average person on the street is just way too slow to change their opinion, even with the facts showing everything is GREAT!

If they weren't so stupid, they would have sold everything they owned, and bought SPY on margin!!!!!!!!

Had they done so, they could be buying a new house today with cash.


jbvtme's picture

so suddenly the middle class thinks the grain bucket is half empty?

Handful of Dust's picture

Merikans don't even think when they buy a house they just sign on the dotted line where the salesperson tells them as the wife looks at the new fridge and the husband never worries about the possibility of losing his job at HP, jcp [fill in any company here]......both brainwashed by the zillions of MSM/NAR/Fed messages

prains's picture

years of bottomless refillable soda is gonna take it's toll eventually

Occams_Chainsaw's picture

Everyone at HP worries about losing their job every day.  It's a rather sick environment.

Occams_Chainsaw's picture

Everyone at HP worries about losing their job every day.  It's a rather sick environment.


Edit....sorry for the double post...something glitched on my HP computer.

Greenskeeper_Carl's picture

which FSA? the hood rats, or the large corporations and bankers? gotta be more specific. Interesting enough, if you look at that chart, and go with the assumption that the smart one are the ones that realize 'the worst is yet to come', the smartest people in the country are the 'hispanic high school grads over the age of 65 who lives in a rural area"

StychoKiller's picture

"Over?  Did you say it's over?!   Was it over when the Germans bombed Pearl Harbor?..."

GernB's picture

No. It was over when the Japanese invaded Poland.

corporatewhore's picture

please splain to me how that Texas frat boy named Bush didn't have a hand in this.

NoDebt's picture

No, no, no.  You explain to me how the Kenyan thinman, Bathhouse Barry, STILL claims not to have a hand in any of this.

corporatewhore's picture

my comment was to illustrate that neither is blameless nor solely responsible for this mess. this is beyond the scope of any individual or party.  neither party has an answer as we all muddle through this economic nightmare.

prains's picture

this is the culmination of 100 years of r'tard cabernet whine.

infinity8's picture

"Kenyan Thinman" - LOL! But, the hand he has in this is a looooooooooonnng continuation mimi.

JR's picture

You mean the George W. Bush who set a goal of helping 5.5 million minority families buy their own homes before the end of the decade, hoping to end what he called a "home ownership gap"? That George W. Bush? The president of the United States?

Who traveled the “minority communities" citing high down payments as a major obstacle to home ownership for low-income families and pushing for millions of dollars to expand the American Dream Down Payment Fund?

And all the while, Barack Obama was bringing Chicago-mob politics to Washington, and with him the mob’s use of ACORN and  the Community Reinvestment Act (CRA) for a grassroots activist movement to force banks into bad loans —planting the seeds of today’s financial mortgage meltdown. The Barack Obama who for years worked with ACORN (the Association of Community Organizations for Reform Now),  abusing the law by forcing banks to make hundreds of millions of dollars in ‘subprime’ loans to often uncreditworthy customers using intimidation tactics, public charges of racism and threats to use CRA to block business expansion?  And now taxpayers are being forced to pay off these bad loans.

And most significant of all, ACORN was the driving force behind a 1995 regulatory revision that greatly expanded the CRA and laid the groundwork for the Fannie Mae, Freddie Mac home financial crisis.

And Barack Obama was the attorney representing ACORN in this effort.

And now he’s president of the United States? That Barack Obama?

$200 million program will help tens of thousands of low-income families to become homeowners – HUD December 16, 2003


Tegrat's picture

Awesome post JR! I have been preaching the CRA expansion as the cause of the crisis for years. However, people have their handlers and pesky facts will aways get in the way of what they have been told.


Matthew 7:6

“Do not give dogs what is sacred; do not throw your pearls to pigs. If you do, they may trample them under their feet, and turn and tear you to pieces.


moneybots's picture

"Awesome post JR! I have been preaching the CRA expansion as the cause of the crisis for years"


Greensapn wanted a housing bubble.  PERIOD.


As Krugman noted, Greenspan needed a housing bubble to revive the economy from the .com crash.

moneybots's picture

"And most significant of all, ACORN was the driving force behind a 1995 regulatory revision that greatly expanded the CRA and laid the groundwork for the Fannie Mae, Freddie Mac home financial crisis."


So?  What is revised can be revised again.  A republican was President in 2001 and congress was republican in 2001.

President Bush didn't announce The Ownership Society because ACORN owned him, he announced it because Alan Greenspan needed a housing bubble to goose the economy so Bush could get re-elected in 2004.

drendebe10's picture

.... and yet the corrupt ruling political elite and the arrogant narcissistic illegal alien indonesian kenyan muslim ignoramus sociopath liar in chief all continue to live their celebrity grand imperial life styles at the expense of tax paying U.S. citizens......  ain't it grand....

tempo's picture

Obama renames his dog "Reagan". Its true. Maybe his cat will be named "Washington" as another sign of love and respect for America.

NoDebt's picture

You're shitting me.  Really?

Greenskeeper_Carl's picture

well, this administration does have a lot in common with the reagan administration. They both spent huge amounts of money on unneccessary overseas adventures, wasted vast sums on military hardware that wasn't required if the 'defense' budget was actually just about keeping america safe, and they both believed that 'deficits don't matter' Reagan sounds like a great name for it.

prains's picture

....there's a monkey/chimp joke in there somewhere but in good taste i'll leave that to the knuckle draggers to extrapolate

Silver Bug's picture

Of course the crisis is NOT over, only a blind politician would believe this and I don't think they even believe their own lies! Look at inflation, look at the cost of housing. This is insanity.



Kirk2NCC1701's picture

I'd wager that these results are heavily biased by Employment, i.e., whether a person has a job, if it's a decent paying job, and if they feel secure in keeping it.

Until all those dollars start coming back, the current Ponzi game will continue.  This could go on for years, not months - given how TPTB have been able to stretch things much further than most here have thought possible.

Bunga Bunga's picture

Work hard to pay taxes.

TeethVillage88s's picture

How do you know? Who, What, Where, When, How, Why?

I once questioned an attractive woman from one of the former Soviet Countries about her statement that they had parties with all kinds of meat and things to eat. I said I don't believe you it is very expensive. Well, I think that was the last time she was interested in me. Apparently, I had called her a liar and didn't know the pride, honesty, and other things involved. But I didn't say she was a liar exactly.

Anyway, how do you know there is something bad coming to the USA?????!!!

Maybe you are a Neo-Con?

Squid Viscous's picture

eva-thang's fine yo... but where my EBT fo June?

steveo77's picture

Nuke disaster is a symptom of this corrupted broken society


I added a post that Cisco suggested, one of the reasons for Nuke Pro is an easy resource for people to point to to help educate, and also for ease of finding information (again).    

This is a four part writing that describes the Nuke Cartel and all it's woe on us.


i_call_you_my_base's picture

If 2007 is deemed by all to be a bubble and prices are mostly back to 2007 levels, then how is now not a bubble? Financial wizards / idiots forget that someone has to actually live in that fucking home. Flip it 100 times, hold inventory, reduce rates, whatever, that fact remains.

NOTaREALmerican's picture

Unless 2007 wasn't actually a bubble.   It's hard to define what a bubble is when the unit of measure is also decreasing (in value). 

i_call_you_my_base's picture

I don't think it's that hard. Median household income against median home prices tracked steadily for decades. Deviation from the long-term trend is a bubble. It's because the amount of money one must contribute to the home has to leave enough income for other baseline spending. Once these two numbers diverge, it's undoubtedly a bubble. If anything, inflation in other goods excacerbates the problem rather than masking it.

NOTaREALmerican's picture

I hear what you say, but "Deviation from the long-term trend" is the problem.

The top 20% (or so) HAVE deviated from the long-term trend.   They've got their own economy and country now.   Sure, the Trash Class is left with the old-economy and - assuming they've inherited all these long-term trends - they can't make it (but, they aren't starving so who care really).  

We've got to stop combining the Trash Class with the top 20%; they live is separate worlds with completely separate political and economic systems.     Just because we might see each other stuck in traffic doesn't mean the two classes have anything in common.

AsIseeIt's picture

A little help on the "bubble" question:  http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...


And, yeah, we'll in one hell of a bubble, the bubble to end all bubbles (including this little housing blip)..........................a money bubble that will change the world when it pops.

TeethVillage88s's picture

Good Link. MMT Economics agrees with you I think. Only it believes that a "Sweet Spot" can be found to take advantage of Fiat Currency to allow a moderate rate of inflation.

I liked your link though and the basis of Austrian Economics might be clearer through this article.

A) Mal Investment: I believe that Banks & Investors are always looking for mal-investment opportunities which are rent-seeking and don't add value to the economy.
B) The Late 18th Century and up to the Great Depression and end of WWII seems to indicate that banks were not willing to invest in USA.
C) Therefore, public banking versus private banking seems to have merit here. Bankers eliminated silver certificates in 18th century which the farmers relied on to finance their crops, gold certificates would not do the job.
D) My charts from FRED don't look like yours from FNMA.

http://research.stlouisfed.org/fred2/series/HSN1F (new Homes Sales)
http://research.stlouisfed.org/fred2/series/HOSINVUSM495N (existing homes sales)

Sales have been down since Oct 2005, so why did Austrian School get it wrong. It seems clear that Banks had time to plan the Financial Crisis and Plan out their own bailout which they even secured fees to manage themselves. Looks like they had 2 years easy to plan the 2008 Financial Crisis and how the Tax Payers were going to pay for it.

"Doing Gods Work". What a bunch of assholes. They ripped us off and the politicians were nothing but Tools, but not tools of democracy. They were tools of Alpha Males in Banking. Bitches.

csmith's picture

"...how is now not a bubble?"

Obviously it is. Home prices that keep the BANKS solvent destroy natural market function by pricing entry level homes out of reach of already-strapped first time buyers. This in turn wrecks the move-up market. High end, all cash market (which is TINY in the greater scheme) is the only one working now, entirely due to QE.


plane jain's picture

Or low end all cash (investors).  Working with a Realtor 'cause we have to live somewhere.  SE Michigan and he says sales are 60% cash, sellers shunning FHA financing, and homes selling quickly under about $200K.  Heck, I called him the day he listed one (which I thought was overpriced).  I didn't even get to see it because the seller already accepted an above asking price cash offer.

Kaiser Sousa's picture

i hope ya'll r ready for the dump of the phony paper prices of real money tonight when ur sleep counting sheep...

i will be up with my order in the purchase cue with my finger on the fucking button...

nighty, night MoneyChanger scums....

Rainman's picture

You mean there are still dumass Murikans who think the gubmint is coming to help them ? ...they must all be MSNBC viewers.

NOTaREALmerican's picture

The Trash Class is only needed as debt-serfs and soldiers.  It's the happiness of the Elysium Class and the Elysium Management Class that we need to worry about.   As long as the Trash Class is optimistic enough to think their kids are above-average everything will be fine.

daveO's picture

Why, yes sirree. They're all Upper Middle Class(which simply means more debt than most). The burden of college loans is starting to bite into their pretentiousness. 

foodstampbarry's picture

We the other 48% work for the federal gov't and life has never been better sukerz!

AccreditedEYE's picture

70% believe we're still in crisis? You could not speak more golden words to sentiment traders... most Bullish thing they have heard all month. Well, that and "prepare for the June Swoon" out of CNBS. BTFATH

Miffed Microbiologist's picture

If 70% still believe we are in crisis they certainly are hiding this fact. Several work associates are using their HELOCs to take fancy vacations and put their kids through college. Every one but me has bought a new, mainly high end car. No one seems very concerned but me. I'm the gold bug comic relief. May be it's just some inner turmoil I can't see under the persona of blissful ignorance.


StychoKiller's picture

Normalcy bias, head in the sand, call it what you will...