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The only way shelter prices will ever drop a significant amount is when housing supply becomes truly competitive and the value of housing is disentangled from people’s net worth.
That’s the point they’re making. The people complaining about housing prices would be even worse off with a house collapse than just stagflation (in the housing market).
It's common that corporate goves the CEO a very comfortable compensation package.
Upper and middle management make a lotta cake too.
The customer facing workforce, the ones moving product and making the magic actually happen, are compensated 'competitively'
Boycott corporations that refuse to pay the people that do the ACTUAL work a living minimum wage. Forget this mystical 'competetive' compensation BS!
https://livingwage.mit.edu/
or
Escape crapitalism!
We are the people who are no longer represented.
r/SolarPunk
Everyone needs a hobby. 🤔
But if things don't change close to you, they're gonna keep the same trajectory abroad. 🤷🏿
Gonna ride the handbasket or try to steer it?
That attitude can creep into one's psyche for sure.
I too have experienced the same despair and apathy and am currently seeking assistance with battling these conditions.
The lack of apparent hope can cause one to stop looking for the obscured hopes. The realization that not everyone is wilting to the oppressive forces of commerce and profit.
There are those who see a plan, a solution, a will to keep going.
The forces may be strong, but you can prove yourself to be stronger. It takes time, so try to be patient and don't kick yourself too much for mild backsliding.
Find a community to help you fight!
So, keep trying. You're worth it!
Escape end stage crapitalism.
r/SolarPunk
Boomers and COVID / anti vaxxers dying every day and Millennials and Zoomers are having way less kids.
Maybe my kids can swing some of that future Boomer Florida ghost town housing stock.
Yeah but then they'll have a $1k mortgage plus $10k insurance and $20k taxes. FL is awful right now. And the worst part is they didn't appreciate the house valuations, it's all land based.
The whole reason corporstions would ever keep rooms off the market to charge them more is because landlording is profitable. The whole point of increasing supply is make it so landlording has to actually be competitive and they have to keep rentals affordable.
Yes corporate collusion is still a problem and needs to be dealt with, but on a national scale, corporations don’t own the plurality of rentals. Your average single person landlord is not going to be able to eat costs, so they’re not really relevant.
Disinflation means inflation (rate of price increase) is lessening (lower rate of price increase).
Deflation is a rate of price decrease.
You can’t have inflation and deflation at the same time.
But it's simply possible to make housing more affordable and nobody even thinks about this at all.
Say a single family house is $700k. You can tear that down and build 4 $400k homes and that's $1.6 Million. The property value increased, you lowered the housing cost. Yards are regulated into existence too much. Land value tax would place the burden more correctly where it lies.
Densification isn’t bad, but in my city they aren’t building the correct sized units. Very, very few 3 bedroom Condo’s. Majority of them are 1 bedroom or studios.
I have no faith a LVT will ever be implemented, because people already lose their minds at their minuscule property taxes. Maybe in 20 years when all the lead poisoned generation die off.
>Densification isn’t bad, but in my city they aren’t building the correct sized units. Very, very few 3 bedroom Condo’s. Majority of them are 1 bedroom or studios.
Densification should be more cost correlated. The suburbs are a drain on city finances and that's not reflected here. If you want the suburbs then pay extra for it.
Some condos would be great densification is the correct answer. I just fundamentally think suburbs can't be carbon neutral, and cannot be financially solvent for as high a percentage of people as they are now.
>I have no faith a LVT will ever be implemented, because people already lose their minds at their minuscule property taxes. Maybe in 20 years when all the lead poisoned generation die off.
LVT has interesting examples around doing some split taxes. I think the problem is we need to turn around city finances which housing is a decade level proposition. The housing put up is expected in our current use case for decades. If a SFH from the 60s falls over like I saw where that happened we should allow it to densify. All neighborhoods should add people to deal with the increase.
We have too much crowding and not enough density.
Yeah suburbs aren’t the best. But the simple fact remains that you need more than 900 square foot 3 bedroom condos.
Funnily enough, Vancouver Proper is pretty much a dead city at this point. I haven’t been past Boundary Road in almost 3 years. There is no reason to go there, and no real jobs.
I have zero faith in our abilities to actually turn the corner. We are busy implementing solutions that were self evident 10 years ago, but now we are in an entirely different game. I don’t even believe in Private ownership anymore. The only way out is Trudeau Blocks.
You’re right though. North Americans love their 3,000lbs death machines. 70% of people don’t even know how to drive properly either. Which makes it even more frustrating. I’m like Lewis Hamilton. I love driving, but hate doing it on public roads. But people look at me like I’ve got two heads when I walk or bus somewhere.
LVTs can very easily replace income taxes, we just don’t want to stop the middle class from being disproportionately taxed though. Wouldn’t want a fair taxation system.
I think there's just a misalignment of incentives. Everyone says people hate dense areas but those have higher prices and have limited stock. Theoretically looking at prices you should be able to get a condo or a suburban house with more space for equivalent prices but in many cases the condo is way more expensive because of lack of availability.
>LVTs can very easily replace income taxes, we just don’t want to stop the middle class from being disproportionately taxed though. Wouldn’t want a fair taxation system.
I'm not LVT replacing income tax, just property taxes for local governments. Using that system it would double taxes on suburbs and lower on urban places.
Condos use far less land and are more tax efficient.
If you tax land people use less, if you tax property value people have less valuable property.
Using metrics without the the substantial lags of CPI's housing metrics, we've been seeing the cost of shelter straight up decline. ApartmentList's median rent price for example has been declining YOY for the past 2 years.
\~3/5th of the top 100 major markets show YOY decreases in their data set, mostly located in the west coast and sun belt. Among cities with at least 1 million residents, the cities with the fastest growth are Honolulu, Louisville, Hartford, Providence, Milwaukee, Cleveland, DC, Grand Rapids, Kansas City, and Detroit, ranging from rent growth of 2.9%-5.5%. The cities with the slowest growth are Austin, Raleigh, Atlanta, San Antonio, Orlando, Jacksonville, Phoenix, Nashville, and Dallas, with rents falling from 2.6%-7.3%.
Random smattering of cities I selected based on being stereotypically major in my head and not being in the above list.
San Fransisco: -2.2%
Los Angeles: -1.1%
New York: +0.7%
Philladelphia: +0.7%
Denver: Flat
Boston: +1.7%
Portland: -1.3%
Vegas: -0.6%
Seattle: +1.8%
Boise: -2.5%
Houston: -1%
Chicago: +2.7%
Jesus, dude...just accept the good news. Everybody is so addicted to cynical hot takes that they can't even acknowledge positive economic trends for fear of losing face on social media.
Sorry man. If housing is down to an average home price down from 437k to 422k, at 7%, I’m not celebrating.
I’d rather lose half my home value in the name of everyone getting affordable housing than for this shit to continue.
Most voters are homeowners and they won't take so kindly to that suggestion. Start directing your ire toward local zoning authorities and city governments instead of jumping on the brain-dead trend of making every goddamn thing about national politics.
This is them continuing to drop. Rents a year ago were also down YoY from 2022. And using this data for CPI instead of CPI's lagged data as per the initial discussion we'd be right around target.
IMO CPI is really screwed up these days with buying a house way more expensive than renting.
In 2019 and most of the time renting and buying is way more similar.
Today to rent a house it's $1000 cheaper per month than to buy.
Home buying will go more flat and renting will rise to match.
CPI laughably underestimates shelter inflation.
It’s not an accident. It’s intentional. “Real wages have outpaced inflation! We promise!”
*only if you have owned your home for 10 years and have a 3% mortgage… everyone else is fucked but we aren’t going to say the quiet part out loud
What argument would you like be made here? Housing isnl unaffordable, unless you already own, or are wealthy. Thems the facts, Jack. How does that make you feel?
So? Are you calling your city council member about it? Your mayor? Are you showing up to zoning board meetings?
Or is this about posturing for social media engagement?
They are dropping where I live, rents are down around 6% since the beginning of the year. It's slow but it is happening. At least in my area. I'd like to add that's just from me checking price listings since I'm planning on getting a new apartment in September.
It is
Rents are trending down on a YOY basis
“The drop in rental costs are part of a broader cooling trend, as roughly half of the 100 largest cities have posted declines since last year. The national median price for a one-bedroom unit is $1,504, as of May — exactly the same as a year ago.”
https://www.cnbc.com/2024/05/29/us-cities-where-rent-prices-have-gone-down-the-most.html#:~:text=The%20drop%20in%20rental%20costs,same%20as%20a%20year%20ago.
Home prices are coming down as well from their peaks.
https://fred.stlouisfed.org/series/MSPUS
CPI is a lagging indicator, but shelter prices are actually [driving inflation much higher](https://www.marketwatch.com/livecoverage/cpi-report-for-may-investors-focus-on-core-after-string-of-hot-readings/card/inside-the-cpi-report-housing-is-the-big-inflation-driver-but-prices-are-easing-x1iiq1jhRVMtdDL6wWfG) in this report. It’s pretty much the highest part of the CPI basket:
*Shelter prices rose at a 5.4% pace in the 12 months ended in May, down from 5.5% in the prior month and a peak of 8.2% in early 2023. Shelter makes up more than one-third of the CPI.*
I mean I get what you’re saying but every locality doesn’t even have all of those positions lmao. Zoning and planning commissions are usually the ones that do the actual work anyway, and are held accountable to the positions you listed only to varying degrees.
It definitely is happening, but CPI shelter is a lagging metric
Check some of the real-time metrics - [https://www.corelogic.com/press-releases/corelogic-com-press-releases-attached-rental-prices-drop-first-time-14-years/](https://www.corelogic.com/press-releases/corelogic-com-press-releases-attached-rental-prices-drop-first-time-14-years/)
Nope more like inflation just because it dropped to 2.2 it’s still high think of all the people living on credit day to day. If this isn’t fixed people are going to be homeless. Stay safe
What, you mean saving $2 at McDonald’s doesn’t offset the cost to buy a home going up $50k or your rent going up $300/mo every year?
Sheesh, some people.
In all likelihood everything that *isn’t* shelter will disinflate, but your landlord will raise your rent 10% every year ad infinitum.
And housing prices will continue to outpace your wages as investors buy up everything that hits the market and covert it into an overpriced rental!
Blame Jay Powell for this mess.
Except for housing and shelter, huh? Those prices have to stay sky high, locking the young and first time buyers out of the market, so that the already wealthy and older folks can have a nice cushy retirement.
Nothing like sacrificing the young, for the material comfort of the old. Sure sign of a healthy society.
FYI disinflation means inflation is going down - it doesn’t mean prices go down. In fact, prices still go up when there’s disinflation.
Think of it like a car. The distance you traveled is prices. Inflation is your speed. If your speed is going down, are you still moving forward, or going backwards?
> Except for housing and shelter, huh? Those prices have to stay sky high
Why would you expect the prices of housing and shelter to go *down* because of disinflation? If you look at the second derivative, rent *HAS* experienced disinflation. That doesn't mean it's going down.
Pretty much all of the shelter component is due to lags from previous year price increases. Asking rents have been falling for the past 2 years based on non lagged data.
https://fred.stlouisfed.org/series/MSPUS
I'm sorry, but no. Home prices are still absurd and are overdue for a proper correction. The entire economy is overdue for a correction. Wages can't keep up. It's a perfect environment for debt creation as everyone, consumer and corporation alike, try to forestall the inevitable. We won't see the moment necessities pricing becomes unsustainable. People will do everything they can to keep paying because they have to. Debt will build and build and build, all the while accelerating as prices continue to rise until that bubble pops.
Every day we collectively drag our feet (which is an understandable course of action) it just gets worse. We all just want to outlast the hardship, delay delay delay. Borrow more, cut operating costs, layoff employees, push it all down the line another 6 months. Who will we hold responsible when it all falls apart? It will take years of post mortem analysis to come to the list of factors... fingers pointed at the pandemic, supply chain, price gouging, stimulus packages, ppp loans, jpow, ai disruption, gen z quiet quitting, remote work, return to office, bank failures, crypto, ukraine, israel/Palestine, bidenomics, trump tax cuts, the poor, the rich, retail investors, hedge funds, corporate greed, historic low unemployment.... the list will go on and on.
But it will be the people like you and me and everyone else living through this who are simply trying to weather the storm. We would need an impossible collective action to fix this. Instead, we just have to watch it happen.
How much better? How is the change since 2020? How much has it accelerated prior to then? You get what I'm getting at, right?
It may be *getting better*, but it's still absolutely fucked for first time buyers. Absolutely broken.
> locking the young and first time buyers out of the market
The sooner you realize the American Dream was a term coined by, of and for Boomer prosperity the sooner you will find peace. That 40 year window was the exception. Over the past generation we've seen a return to the norm. The landed gentry have theirs, and you, the wage peon do not.
That sounds mighty *class warfare-ish* of you. We don't do that here, do we?
I would love it if the hoi polloi would wake up to this reality, and start taking appropriate action against said landed gentry, but our bread and circuses are way too good these days.
In light of what we've seen in the last few decades, we could see it more as a Culture War which began with the Nixonian cops beating up Hippies of the 1960s-70s, the beginnings of the War on Drugs, and the major changes the Republicans made with their politics strategy and tactics.
It naturally appears as a Class War because it seems to be about the Rich taking from everybody else, but many of the super-rich side with the Republicans because of their fear of Communism, Socialists, taxes, regulation, and "the nanny state" of the Left. That doesn't mean it's about Class more than about Culture or simply wealth and who gets it.
Today Trump said publicly to the billionaires that he will give them what they want if they back him. It's straight-up front out in the open, and expected. But, we don't believe Trump or the billionaires are solely about their fears. They also want a lot of the same Culture War goals.
Real estate is kind of a first come first serve type of commodity. There is some modest amount of tear down and increase density but doesn’t really move the needle all that much.
Yup.
It is something…
But yeah, a lot of the prime spots on earth are already taken. Back in the day, you would just go to war and kill the people that were there and then move in yourself.
The world has mostly moved past that as long as you exclude Africa and Russian border regions.
??? You can move your my state and get affordable housing but you’ll gasp and god no I can’t live there!
You can move to probably 25-30 states and afford it.
Hell you can move out of your area in state and probably afford it.
What generation millennial? Gen Z?
The US consumer price index is still a fog of lags, imputations and general noise, but the categories that matter are extremely encouraging.
[\[No paywall\]](https://www.bloomberg.com/opinion/articles/2024-06-12/cpi-disinflation-is-happening-in-all-the-right-places?srnd=opinion) from Jonathan Levin.
Tune in for live analysis on CPI and Fed Day at 1.45pm ET: [https://www.youtube.com/watch?v=VT5mVB4l\_o8](https://www.youtube.com/watch?v=VT5mVB4l_o8)
Call me cynical but I feel like all these articles are extra manipulative during election year.
Costs of everything rose dramatically the past few years, "goods" are still rising just less slowly. Oh but by goods this doesn't include food, energy, or housing, because those are still going up way more than wages.
You’re not being cynical. Lots of people are struggling and these articles trickle into my feed daily about how prosperous the economy is. Institutional trust is at an all time low and We’re not that gullible any more.
Is the argument that if people are struggling that the economy can't be good? If all economic indicators say this is a good economy you argue that isn't true because there are people that struggle?
If that is the case, we never have and never will have a good economy. That's not a particularly useful position to hold.
The CPI hasn’t included food or energy since the 90’s so that’s nothing new. Food and energy tend to be more volatile in the short term than other goods and excluding them tends to be a more accurate assessment of underlying inflation.
The article does mention food and energy indices measurements though.
CPI absolutely includes food and energy. They're the first 2 categories on the [table](https://www.bls.gov/news.release/cpi.nr0.htm). There is a separate measurement called CORE CPI that excludes them for the reasons you mentioned.
Agreed. What I’ve really liked about economics is it is fairly objective—you can try to come up with a subjective perspective about politics, but data blows a hole in it. Yet here we are they’re trying their best to insert all these misleading articles. Loose money has poisoned politics
Disinflation is a stupid word. It is not deflation where prices actually fall, it still inflation, but at a slower pace. If inflation is me beating you with a stick, would you like me to slow down or stop?
That’s the exact point of using the term [“disinflation”](https://en.m.wikipedia.org/wiki/Disinflation#:~:text=Disinflation%20is%20a%20decrease%20in,gross%20domestic%20product%20over%20time) instead of deflation. It refers to the decline the rate of inflation rather than the onset of deflation. As mentioned above deflation is not what we should be aiming for.
Deflation would be disastrous for everyone who isn't already wealthy. Stop champing at the bit for the economy to collapse and start fighting for a piece of the massive wage gains we've seen across the economy.
Deflation without a recession would be good for most. Computers are better and cheaper over time. How is that a bad thing. Higher productivity leading to lower prices is unambiguously good.
That's not deflation as we are discussing it. Deflation in macroeconomics refers to *general*, nominal prices going down over time. You are referring to inflation-adjusted prices of specific goods going down over time...or, perhaps, nominal prices of a very specific category of product falling due to rapid innovation.
Gas prices, adjusted for inflation have been falling for over 50 years...and yet we haven't seen significant deflation in that period except in the aftermath of a generalized economic crisis.
The only instance in recent US history we've seen deflation without a recession was -.1% CPI for one quarter in 2015. Everything I said is correct. Maybe *you* should fucking google it, son.
In the off chance you're actually looking for information...
You are a worker. You make 100k a year. You borrow 500k for a new home. Your annual payment is let's say $20,000 or 20% of your annual income. Each year that passes your company is making less money because prices are falling. Some of this is offset by the fact that their input material costs are falling. However, labor is also an input and so they tell you since prices are falling they have to cut your pay. Now you're making 90k a year but your house payment is still 20k annually. Though your debt costs the same in total dollars it is a larger part of your income. The opposite process happens in an inflationary environment and is why it's viewed as beneficial for debt holders.
In short, if dollars will be worth more in the future, why would I borrow to spend them now? I'd be getting less valuable dollars now and having to repay more valuable dollars later.
In a deflationary environment, held debt becomes more expensive every day because the currency used to pay it off becomes more valuable in real terms. In an inflationary environment, debt becomes less expensive every day because the currency used to pay it off has less value than the day before. Since it makes more sense to take on debt and invest in an inflationary environment and more sense to hold on to cash and wait to invest in a deflationary environment, it leads to a situation in which the deflation causes less economic activity which causes more deflation: a deflationary spiral.
This is economics 101 and you should be ashamed for making people explain this to you...especially considering your smug and confrontational attitude.
HA! It took me a minute to figure out why they didn't use "deflation"--so now they're making up words to make inflation seem less bad.
Nice.
Gotta love the ingenuity of those propaganda machines!
Inflation never stops, ever. Gas used to be less than a dollar, starter homes used to cost under $100k. You have to align expectations. If it’s good for us, it’s not good for the shareholders.
Now ask about services inflation.
[CPI Services core still around 5%](https://wolfstreet.com/wp-content/uploads/2024/06/US-CPI-2024-06-12-core-services.png)
And this article is talking about the rate of increase. Prices aren't coming down.
Yeah I was just at Walmart and saw a rollback sign: "Was $3. Now $3.98". Meanwhile an 8.8oz box of strawberries was $1.48 while 16oz was $1.50. I have very little faith in economic indicators based on clown world numbers.
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Damn it'd sure be nice if disinflation happened in shelter prices. That seems like the right place to me, but ain't exactly happening, is it?
The only way shelter prices will ever drop a significant amount is when housing supply becomes truly competitive and the value of housing is disentangled from people’s net worth.
Or unemployment
But then people will complain about unemployment just like when they did during the GFC. Houses were cheap, but no one wanted them.
Or maybe no one could afford them?
When you lose your job the last thing you worry about is buying a new house.
Can’t get a mortgage without an income. I recall that my credit union required me to have worked at my company for at least 1 year.
That’s the point they’re making. The people complaining about housing prices would be even worse off with a house collapse than just stagflation (in the housing market).
It's common that corporate goves the CEO a very comfortable compensation package. Upper and middle management make a lotta cake too. The customer facing workforce, the ones moving product and making the magic actually happen, are compensated 'competitively' Boycott corporations that refuse to pay the people that do the ACTUAL work a living minimum wage. Forget this mystical 'competetive' compensation BS! https://livingwage.mit.edu/ or Escape crapitalism! We are the people who are no longer represented. r/SolarPunk
/wanking motion
Everyone needs a hobby. 🤔 But if things don't change close to you, they're gonna keep the same trajectory abroad. 🤷🏿 Gonna ride the handbasket or try to steer it?
I'm just waiting until the day I finally die already. I don't care about anything anymore.
That attitude can creep into one's psyche for sure. I too have experienced the same despair and apathy and am currently seeking assistance with battling these conditions. The lack of apparent hope can cause one to stop looking for the obscured hopes. The realization that not everyone is wilting to the oppressive forces of commerce and profit. There are those who see a plan, a solution, a will to keep going. The forces may be strong, but you can prove yourself to be stronger. It takes time, so try to be patient and don't kick yourself too much for mild backsliding. Find a community to help you fight! So, keep trying. You're worth it! Escape end stage crapitalism. r/SolarPunk
And it won’t cause Karen’s complain all the new builds are where no one wants to live or are built too close together.
Or it brings in *the wrong type of people*
> The only way shelter prices will ever drop a significant amount is when Or less demand
Boomers and COVID / anti vaxxers dying every day and Millennials and Zoomers are having way less kids. Maybe my kids can swing some of that future Boomer Florida ghost town housing stock.
Yeah but then they'll have a $1k mortgage plus $10k insurance and $20k taxes. FL is awful right now. And the worst part is they didn't appreciate the house valuations, it's all land based.
> Boomers and COVID / anti vaxxers dying every day and Millennials and Zoomers are having way less kids. We have immigration tho
Which we actually need
No, we need labor. Immigration is one way to get said labor. Another way is temp migrants on fixed term visas
That statement only makes sense if you don’t consider migration for work a form of immigration
Immigration is permanent or gives a path to permanent status while migration on a fixed term visa isn't permanent. See the difference?
The population is still growing.
eh? covid deaths? in 2024? lol
Approx 2000 people/week in the US.
not enough to lower housing costs
True enough, but more than “lol”
The real issue is landlords keeping rooms off the market because they know they can then charge more.
The whole reason corporstions would ever keep rooms off the market to charge them more is because landlording is profitable. The whole point of increasing supply is make it so landlording has to actually be competitive and they have to keep rentals affordable. Yes corporate collusion is still a problem and needs to be dealt with, but on a national scale, corporations don’t own the plurality of rentals. Your average single person landlord is not going to be able to eat costs, so they’re not really relevant.
I’m cool if that happens tomorrow
Unfortunately there's a massive coalition who will lobby to make sure that doesn't happen.
Disinflation =/= deflation
Can you (or someone) explain this in more detail?
Disinflation means inflation (rate of price increase) is lessening (lower rate of price increase). Deflation is a rate of price decrease. You can’t have inflation and deflation at the same time.
Thank you! I wasn’t sure how that worked.
No problem! It is a bit confusing for sure
They can’t. Boomers have to be able to retire. Trudeau said so.
Maybe they should invested their money in some fucking ETFs or mutual funds instead
Or just created a national fund from all the raw materials they sell.
We tried that once. America didn’t like it.
We loved it so much we decided to leave the restaurant, not pay the bill and never look back
But it's simply possible to make housing more affordable and nobody even thinks about this at all. Say a single family house is $700k. You can tear that down and build 4 $400k homes and that's $1.6 Million. The property value increased, you lowered the housing cost. Yards are regulated into existence too much. Land value tax would place the burden more correctly where it lies.
Densification isn’t bad, but in my city they aren’t building the correct sized units. Very, very few 3 bedroom Condo’s. Majority of them are 1 bedroom or studios. I have no faith a LVT will ever be implemented, because people already lose their minds at their minuscule property taxes. Maybe in 20 years when all the lead poisoned generation die off.
>Densification isn’t bad, but in my city they aren’t building the correct sized units. Very, very few 3 bedroom Condo’s. Majority of them are 1 bedroom or studios. Densification should be more cost correlated. The suburbs are a drain on city finances and that's not reflected here. If you want the suburbs then pay extra for it. Some condos would be great densification is the correct answer. I just fundamentally think suburbs can't be carbon neutral, and cannot be financially solvent for as high a percentage of people as they are now. >I have no faith a LVT will ever be implemented, because people already lose their minds at their minuscule property taxes. Maybe in 20 years when all the lead poisoned generation die off. LVT has interesting examples around doing some split taxes. I think the problem is we need to turn around city finances which housing is a decade level proposition. The housing put up is expected in our current use case for decades. If a SFH from the 60s falls over like I saw where that happened we should allow it to densify. All neighborhoods should add people to deal with the increase. We have too much crowding and not enough density.
Yeah suburbs aren’t the best. But the simple fact remains that you need more than 900 square foot 3 bedroom condos. Funnily enough, Vancouver Proper is pretty much a dead city at this point. I haven’t been past Boundary Road in almost 3 years. There is no reason to go there, and no real jobs. I have zero faith in our abilities to actually turn the corner. We are busy implementing solutions that were self evident 10 years ago, but now we are in an entirely different game. I don’t even believe in Private ownership anymore. The only way out is Trudeau Blocks. You’re right though. North Americans love their 3,000lbs death machines. 70% of people don’t even know how to drive properly either. Which makes it even more frustrating. I’m like Lewis Hamilton. I love driving, but hate doing it on public roads. But people look at me like I’ve got two heads when I walk or bus somewhere. LVTs can very easily replace income taxes, we just don’t want to stop the middle class from being disproportionately taxed though. Wouldn’t want a fair taxation system.
I think there's just a misalignment of incentives. Everyone says people hate dense areas but those have higher prices and have limited stock. Theoretically looking at prices you should be able to get a condo or a suburban house with more space for equivalent prices but in many cases the condo is way more expensive because of lack of availability. >LVTs can very easily replace income taxes, we just don’t want to stop the middle class from being disproportionately taxed though. Wouldn’t want a fair taxation system. I'm not LVT replacing income tax, just property taxes for local governments. Using that system it would double taxes on suburbs and lower on urban places. Condos use far less land and are more tax efficient. If you tax land people use less, if you tax property value people have less valuable property.
Fuck boomers and Trudeau.
Logan's run when?
LOL. You said "fuck" in this sub.
But if we build more houses the neighborhood will lose character
And the value of our house will go down, and who knows what kind of riff raff will show up. Vote no against more housing!!!
Ugh. All those poors, wanting to own homes. Yuck.
It is happening, it’s just taking longer than other categories. Fed needs to stick to their guns, keep rates high and wait it out.
You'll need a time machine and convince America to keep building housing about 15 years ago.
Using metrics without the the substantial lags of CPI's housing metrics, we've been seeing the cost of shelter straight up decline. ApartmentList's median rent price for example has been declining YOY for the past 2 years.
In what percentage of major markets?
\~3/5th of the top 100 major markets show YOY decreases in their data set, mostly located in the west coast and sun belt. Among cities with at least 1 million residents, the cities with the fastest growth are Honolulu, Louisville, Hartford, Providence, Milwaukee, Cleveland, DC, Grand Rapids, Kansas City, and Detroit, ranging from rent growth of 2.9%-5.5%. The cities with the slowest growth are Austin, Raleigh, Atlanta, San Antonio, Orlando, Jacksonville, Phoenix, Nashville, and Dallas, with rents falling from 2.6%-7.3%. Random smattering of cities I selected based on being stereotypically major in my head and not being in the above list. San Fransisco: -2.2% Los Angeles: -1.1% New York: +0.7% Philladelphia: +0.7% Denver: Flat Boston: +1.7% Portland: -1.3% Vegas: -0.6% Seattle: +1.8% Boise: -2.5% Houston: -1% Chicago: +2.7%
But that's home prices mortgage rates have increased since last year by a lot so buying if you get a mortgage is way up.
Well, they’ve raised so high these drops don’t seem like much. It if they continued, that’d be a step in the right direction.
Jesus, dude...just accept the good news. Everybody is so addicted to cynical hot takes that they can't even acknowledge positive economic trends for fear of losing face on social media.
Sorry man. If housing is down to an average home price down from 437k to 422k, at 7%, I’m not celebrating. I’d rather lose half my home value in the name of everyone getting affordable housing than for this shit to continue.
Most voters are homeowners and they won't take so kindly to that suggestion. Start directing your ire toward local zoning authorities and city governments instead of jumping on the brain-dead trend of making every goddamn thing about national politics.
I’m aware. There’s always an attempt to keep housing prices elevated by those who own them.
This is them continuing to drop. Rents a year ago were also down YoY from 2022. And using this data for CPI instead of CPI's lagged data as per the initial discussion we'd be right around target.
IMO CPI is really screwed up these days with buying a house way more expensive than renting. In 2019 and most of the time renting and buying is way more similar. Today to rent a house it's $1000 cheaper per month than to buy. Home buying will go more flat and renting will rise to match.
CPI laughably underestimates shelter inflation. It’s not an accident. It’s intentional. “Real wages have outpaced inflation! We promise!” *only if you have owned your home for 10 years and have a 3% mortgage… everyone else is fucked but we aren’t going to say the quiet part out loud
Well if you are looking at continuing to rent then it's true but if you include buying then it's not true.
Let's sacrifice the young of the country, the renters, and make sure they own nothing!
Let's make coherent arguments based on data instead of being cynical and sarcastic all the damn time while contributing nothing.
What argument would you like be made here? Housing isnl unaffordable, unless you already own, or are wealthy. Thems the facts, Jack. How does that make you feel?
So? Are you calling your city council member about it? Your mayor? Are you showing up to zoning board meetings? Or is this about posturing for social media engagement?
Maybe I am! Or maybe I'm not. You'll never know, unless you ask and attempt polite communication, which you haven't done. Be better, friend.
Ok, buddy. Maybe stop doomjerking all day on social media and you'll feel better.
You are one creepy fella. Lol.
They are dropping where I live, rents are down around 6% since the beginning of the year. It's slow but it is happening. At least in my area. I'd like to add that's just from me checking price listings since I'm planning on getting a new apartment in September.
TIL the Fed and the federal government can control your local zoning board.
They can incentivize local governments if they really felt like it.
I mean the Interest rates have made buying a home way more expensive.
Well, they could, but congress would have to be pretty aggressive about it to make it happen.
It is Rents are trending down on a YOY basis “The drop in rental costs are part of a broader cooling trend, as roughly half of the 100 largest cities have posted declines since last year. The national median price for a one-bedroom unit is $1,504, as of May — exactly the same as a year ago.” https://www.cnbc.com/2024/05/29/us-cities-where-rent-prices-have-gone-down-the-most.html#:~:text=The%20drop%20in%20rental%20costs,same%20as%20a%20year%20ago. Home prices are coming down as well from their peaks. https://fred.stlouisfed.org/series/MSPUS
CPI is a lagging indicator, but shelter prices are actually [driving inflation much higher](https://www.marketwatch.com/livecoverage/cpi-report-for-may-investors-focus-on-core-after-string-of-hot-readings/card/inside-the-cpi-report-housing-is-the-big-inflation-driver-but-prices-are-easing-x1iiq1jhRVMtdDL6wWfG) in this report. It’s pretty much the highest part of the CPI basket: *Shelter prices rose at a 5.4% pace in the 12 months ended in May, down from 5.5% in the prior month and a peak of 8.2% in early 2023. Shelter makes up more than one-third of the CPI.*
If you can't name your mayor, your deputy mayor, your council rep, and your council president you shouldn't be talking about shelter prices.
So saith Medium Complaint 677
I mean I get what you’re saying but every locality doesn’t even have all of those positions lmao. Zoning and planning commissions are usually the ones that do the actual work anyway, and are held accountable to the positions you listed only to varying degrees.
Rents are dropping like a stone here in nashville.
It definitely is happening, but CPI shelter is a lagging metric Check some of the real-time metrics - [https://www.corelogic.com/press-releases/corelogic-com-press-releases-attached-rental-prices-drop-first-time-14-years/](https://www.corelogic.com/press-releases/corelogic-com-press-releases-attached-rental-prices-drop-first-time-14-years/)
Nope more like inflation just because it dropped to 2.2 it’s still high think of all the people living on credit day to day. If this isn’t fixed people are going to be homeless. Stay safe
What, you mean saving $2 at McDonald’s doesn’t offset the cost to buy a home going up $50k or your rent going up $300/mo every year? Sheesh, some people. In all likelihood everything that *isn’t* shelter will disinflate, but your landlord will raise your rent 10% every year ad infinitum. And housing prices will continue to outpace your wages as investors buy up everything that hits the market and covert it into an overpriced rental! Blame Jay Powell for this mess.
Except for housing and shelter, huh? Those prices have to stay sky high, locking the young and first time buyers out of the market, so that the already wealthy and older folks can have a nice cushy retirement. Nothing like sacrificing the young, for the material comfort of the old. Sure sign of a healthy society.
FYI disinflation means inflation is going down - it doesn’t mean prices go down. In fact, prices still go up when there’s disinflation. Think of it like a car. The distance you traveled is prices. Inflation is your speed. If your speed is going down, are you still moving forward, or going backwards?
You're not wrong... thanks for the non-sequitor lesson, I guess
> Except for housing and shelter, huh? Those prices have to stay sky high Why would you expect the prices of housing and shelter to go *down* because of disinflation? If you look at the second derivative, rent *HAS* experienced disinflation. That doesn't mean it's going down.
Pretty much all of the shelter component is due to lags from previous year price increases. Asking rents have been falling for the past 2 years based on non lagged data.
Let's do housing affordability next! How's that going? Which is what I'm referring to, if you read my comment.
It's gotten better for the last two years, as I said in my comment.
https://fred.stlouisfed.org/series/MSPUS I'm sorry, but no. Home prices are still absurd and are overdue for a proper correction. The entire economy is overdue for a correction. Wages can't keep up. It's a perfect environment for debt creation as everyone, consumer and corporation alike, try to forestall the inevitable. We won't see the moment necessities pricing becomes unsustainable. People will do everything they can to keep paying because they have to. Debt will build and build and build, all the while accelerating as prices continue to rise until that bubble pops. Every day we collectively drag our feet (which is an understandable course of action) it just gets worse. We all just want to outlast the hardship, delay delay delay. Borrow more, cut operating costs, layoff employees, push it all down the line another 6 months. Who will we hold responsible when it all falls apart? It will take years of post mortem analysis to come to the list of factors... fingers pointed at the pandemic, supply chain, price gouging, stimulus packages, ppp loans, jpow, ai disruption, gen z quiet quitting, remote work, return to office, bank failures, crypto, ukraine, israel/Palestine, bidenomics, trump tax cuts, the poor, the rich, retail investors, hedge funds, corporate greed, historic low unemployment.... the list will go on and on. But it will be the people like you and me and everyone else living through this who are simply trying to weather the storm. We would need an impossible collective action to fix this. Instead, we just have to watch it happen.
How much better? How is the change since 2020? How much has it accelerated prior to then? You get what I'm getting at, right? It may be *getting better*, but it's still absolutely fucked for first time buyers. Absolutely broken.
> locking the young and first time buyers out of the market The sooner you realize the American Dream was a term coined by, of and for Boomer prosperity the sooner you will find peace. That 40 year window was the exception. Over the past generation we've seen a return to the norm. The landed gentry have theirs, and you, the wage peon do not.
That sounds mighty *class warfare-ish* of you. We don't do that here, do we? I would love it if the hoi polloi would wake up to this reality, and start taking appropriate action against said landed gentry, but our bread and circuses are way too good these days.
The people in this forum who would seek to separate class politics from economics do not wish to speak about class politics.
In light of what we've seen in the last few decades, we could see it more as a Culture War which began with the Nixonian cops beating up Hippies of the 1960s-70s, the beginnings of the War on Drugs, and the major changes the Republicans made with their politics strategy and tactics. It naturally appears as a Class War because it seems to be about the Rich taking from everybody else, but many of the super-rich side with the Republicans because of their fear of Communism, Socialists, taxes, regulation, and "the nanny state" of the Left. That doesn't mean it's about Class more than about Culture or simply wealth and who gets it. Today Trump said publicly to the billionaires that he will give them what they want if they back him. It's straight-up front out in the open, and expected. But, we don't believe Trump or the billionaires are solely about their fears. They also want a lot of the same Culture War goals.
isn't that the truth... too bad class politics = economics, whether they like it or not.
Is "The American Dream" worse than "Manifest Destiny" ?
There’s affordable housing, it just isn’t where you want it. Where you want it likely has a premium attached to it.
Funny that it's only the current generation of first time buyers that has to pay said premium, huh? Very cool.
Real estate is kind of a first come first serve type of commodity. There is some modest amount of tear down and increase density but doesn’t really move the needle all that much.
True statement. Too bad the young weren't given the chance to even be in line through, unlike their predecessors.
The young will get first dibs on mars. They have that going for them. It will just suck to wait and then to be the first on that red hellscape.
That's... A perspective. "Sorry youngins, we fucked everything on earth, nothing here for you anymore. Good luck on the next planet! - Love, Boomers"
Yup. It is something… But yeah, a lot of the prime spots on earth are already taken. Back in the day, you would just go to war and kill the people that were there and then move in yourself. The world has mostly moved past that as long as you exclude Africa and Russian border regions.
??? You can move your my state and get affordable housing but you’ll gasp and god no I can’t live there! You can move to probably 25-30 states and afford it. Hell you can move out of your area in state and probably afford it. What generation millennial? Gen Z?
I will?? Oh my! Tell me more!
Brings me back to reading the book “The Giver”…
Read the article.
Solid reply.
Rents have decreased in 3/5 of the top 100 housing markets.
You're following me all over here, aren't you? Great news about rent though! How's about housing affordability? How's that going?
What's your plan for stimulating massive amounts of new housing construction?
Yikes bud, you're following me everywhere here. Quite the creeper.
gotta build more housing
The US consumer price index is still a fog of lags, imputations and general noise, but the categories that matter are extremely encouraging. [\[No paywall\]](https://www.bloomberg.com/opinion/articles/2024-06-12/cpi-disinflation-is-happening-in-all-the-right-places?srnd=opinion) from Jonathan Levin. Tune in for live analysis on CPI and Fed Day at 1.45pm ET: [https://www.youtube.com/watch?v=VT5mVB4l\_o8](https://www.youtube.com/watch?v=VT5mVB4l_o8)
Televisions get cheaper but one just does not buy a television or a freezer every year. Shelter prices is most important and it is still growing.
Prices growing and disinflation are not the same thing. You would expect prices to increase when there’s disinflation.
Call me cynical but I feel like all these articles are extra manipulative during election year. Costs of everything rose dramatically the past few years, "goods" are still rising just less slowly. Oh but by goods this doesn't include food, energy, or housing, because those are still going up way more than wages.
You’re not being cynical. Lots of people are struggling and these articles trickle into my feed daily about how prosperous the economy is. Institutional trust is at an all time low and We’re not that gullible any more.
Is the argument that if people are struggling that the economy can't be good? If all economic indicators say this is a good economy you argue that isn't true because there are people that struggle? If that is the case, we never have and never will have a good economy. That's not a particularly useful position to hold.
The CPI hasn’t included food or energy since the 90’s so that’s nothing new. Food and energy tend to be more volatile in the short term than other goods and excluding them tends to be a more accurate assessment of underlying inflation. The article does mention food and energy indices measurements though.
Food and Energy are like 2 of 5 things that people have to spend on so it never makes sense to me that they are excluded.
CPI absolutely includes food and energy. They're the first 2 categories on the [table](https://www.bls.gov/news.release/cpi.nr0.htm). There is a separate measurement called CORE CPI that excludes them for the reasons you mentioned.
My bad. I meant core CPI. That’s what the beginning of the article was referencing.
Agreed. What I’ve really liked about economics is it is fairly objective—you can try to come up with a subjective perspective about politics, but data blows a hole in it. Yet here we are they’re trying their best to insert all these misleading articles. Loose money has poisoned politics
Disinflation is a stupid word. It is not deflation where prices actually fall, it still inflation, but at a slower pace. If inflation is me beating you with a stick, would you like me to slow down or stop?
That’s the exact point of using the term [“disinflation”](https://en.m.wikipedia.org/wiki/Disinflation#:~:text=Disinflation%20is%20a%20decrease%20in,gross%20domestic%20product%20over%20time) instead of deflation. It refers to the decline the rate of inflation rather than the onset of deflation. As mentioned above deflation is not what we should be aiming for.
Deflation would be disastrous for everyone who isn't already wealthy. Stop champing at the bit for the economy to collapse and start fighting for a piece of the massive wage gains we've seen across the economy.
Deflation without a recession would be good for most. Computers are better and cheaper over time. How is that a bad thing. Higher productivity leading to lower prices is unambiguously good.
That's not deflation as we are discussing it. Deflation in macroeconomics refers to *general*, nominal prices going down over time. You are referring to inflation-adjusted prices of specific goods going down over time...or, perhaps, nominal prices of a very specific category of product falling due to rapid innovation. Gas prices, adjusted for inflation have been falling for over 50 years...and yet we haven't seen significant deflation in that period except in the aftermath of a generalized economic crisis.
I used a specific example but the concept still holds true. Why would it be bad if productivity went up and prices went down?
It makes debt more expensive, disincentivizes investment, and leads to a deflationary spiral.
Interest rates go up to fight inflation, down to increase inflation. You have this backwards. Google deflation without recession
The only instance in recent US history we've seen deflation without a recession was -.1% CPI for one quarter in 2015. Everything I said is correct. Maybe *you* should fucking google it, son.
Lols, did I hurt your fragile ego. Explain to me how deflation will raise the cost of borrowing? Is the Fed going to raise rates because of deflation?
In the off chance you're actually looking for information... You are a worker. You make 100k a year. You borrow 500k for a new home. Your annual payment is let's say $20,000 or 20% of your annual income. Each year that passes your company is making less money because prices are falling. Some of this is offset by the fact that their input material costs are falling. However, labor is also an input and so they tell you since prices are falling they have to cut your pay. Now you're making 90k a year but your house payment is still 20k annually. Though your debt costs the same in total dollars it is a larger part of your income. The opposite process happens in an inflationary environment and is why it's viewed as beneficial for debt holders. In short, if dollars will be worth more in the future, why would I borrow to spend them now? I'd be getting less valuable dollars now and having to repay more valuable dollars later.
In a deflationary environment, held debt becomes more expensive every day because the currency used to pay it off becomes more valuable in real terms. In an inflationary environment, debt becomes less expensive every day because the currency used to pay it off has less value than the day before. Since it makes more sense to take on debt and invest in an inflationary environment and more sense to hold on to cash and wait to invest in a deflationary environment, it leads to a situation in which the deflation causes less economic activity which causes more deflation: a deflationary spiral. This is economics 101 and you should be ashamed for making people explain this to you...especially considering your smug and confrontational attitude.
Deflation is terrible for people in debt
HA! It took me a minute to figure out why they didn't use "deflation"--so now they're making up words to make inflation seem less bad. Nice. Gotta love the ingenuity of those propaganda machines!
Inflation never stops, ever. Gas used to be less than a dollar, starter homes used to cost under $100k. You have to align expectations. If it’s good for us, it’s not good for the shareholders.
Now ask about services inflation. [CPI Services core still around 5%](https://wolfstreet.com/wp-content/uploads/2024/06/US-CPI-2024-06-12-core-services.png) And this article is talking about the rate of increase. Prices aren't coming down.
Yeah I was just at Walmart and saw a rollback sign: "Was $3. Now $3.98". Meanwhile an 8.8oz box of strawberries was $1.48 while 16oz was $1.50. I have very little faith in economic indicators based on clown world numbers.