Why Americans Can’t Afford Housing: An Explanation From So Far In Left Field It May Be Right After All

image of medicines for sale in Seoul South Korea
The medicine market in Seoul, South Korea, whose citizens live three years longer, on average, than Americans.

There have been a number of recent stories in the press that have attempted, for good reason, to explore the ‘other’ side of the affordable housing crisis.

What other side? Well, it takes two to create affordability. The seller . . . and the buyer.

You the buyer (counting pretty much all of us at some moment in our lives) have a unique ability to scrape together enough cash to buy a home, or rent one. Since virtually all housing-as-shelter is sold to individuals who borrow money in order to make the purchase, the financial difference between buying and renting is not profound.

Can weekly or monthly payments be made that are large enough to either rent, or to secure a mortgage? (Don’t forget the down payment if needed, and ongoing unavoidable costs like utilities.) If the answer is no, the house you are considering is unaffordable, regardless what anyone else thinks.

How do you get more money to buy? The complexities of payment for work done in a democracy offer few simple solutions. Demanding a raise  from your employer increases the possibilities of making your dream home affordable, if it works. Otherwise, not.

Nations by and large are limited to bemoaning stagnating wages, reading economic tea leaves to puzzle why while they wait for market forces to hopefully one day work their magic. Unless the nation is a centrally-planned economy (think former Soviet Union) very little can be done to lift everyone’s wages at once.

Which brings us to our headline. There are also some indirect (think left-field) ways of making housing more affordable to all buyers. Cutting taxes is one example, though when these supposed benefits occur they are often no more financially empowering than a butterfly kiss on the cheek.

More intriguing, however, we’d like to turn the attention of Americans to a series of measures that might just free up enough cash in the average pocket to make a real difference to someone hoping to acquire an affordable home.

Consider the citizens of other wealthy countries. Just how much money do Americans by comparison waste weekly, monthly, annually of their income when, by exercising a little political will, they simply don’t need to do?

When you digest the details of this subject in the following article, be sure to hang in for an important observation: the real reason American wages have been stagnating for years. (That stagnation has guaranteed that wages have not kept pace with housing costs.)

Jobs lost overseas?  No. Lack of competitive products to sell on a world market? No.

Americans, blinded by their own exceptionalism, are allowing their pocketbooks to be cynically strip-mined by a bloated, insatiably greedy health care system together with its legions of lobbyists and political fellow travellers.  Read more in The Hill: US health care is an ongoing miserable failure