Despite promising to bring housing costs down for consumers, the most recently available housing data reveals that it’s never been more expensive for Americans looking to purchase a home.
Data from the Case-Schiller Home Price Index, U.S. Census Bureau, and Federal Reserve shows that the cost of purchasing a home relative to household income is at an all-time high.
Home prices are now 7.64 times greater than the median household income. Prior to President Joe Biden entering the White House, the highest ratio of home prices to household income occurred in 2006, at the pinnacle of the President George W. Bush-era housing bubble. In January 2006, housing prices were 6.82 times greater than the median household income.
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The high housing costs witnessed under the Biden administration are a remarkable departure from historical norms. From 1978 through the end of 2001, housing prices were between four and five times greater than annual household incomes. Housing prices soared in the early 2000s, but they did not reach current levels at any point during Bush’s presidency. Then they crashed hard from 2006 to 2009, triggering the Great Recession.
Throughout Barack Obama and Donald Trump’s presidencies, housing prices were significantly lower than they are now. Prices were typically five to six times higher than the average household income. Economic growth occurred during long periods of both Obama and Trump’s terms, but prices did not come close to matching the numbers we’ve seen since the Biden administration took over.
Since March 2022, the ratio of home prices to median household income has continuously stayed above seven, meaning housing prices have been at least seven times greater than household income for most of Biden’s presidency. Even worse, the most recent data shows prices appear to be on track to become eight times higher than household income before Biden’s first term ends.
These troubling figures only tell part of the story, however. Not only have home prices skyrocketed compared to income levels, the Federal Reserve has also increased interest rates significantly in recent years to curb out-of-control inflation, causing mortgage rates to rise to levels not seen in more than 20 years.
That means that both the sticker prices of homes and the cost to finance a purchase are increasing rapidly at the same time, a disastrous combination for consumers.
What has caused the cost of homes to increase so dramatically during Biden’s term?
There are many factors that affect housing prices, but two of the biggest are Biden’s reckless spending policies and his costly assault on traditional energy sources, such as oil and natural gas.
Under Biden, the federal government has gone on an unprecedented spending spree. Federal outlays surpassed $20 trillion in Biden’s first three years in office, far more than any other president’s first three years.
Deficits have also remained at extremely high levels. Biden’s federal deficit for fiscal year 2023 was $1.7 trillion. That’s the biggest deficit in U.S. history, excluding the COVID-19 lockdown years of 2020 and 2021.
Biden’s addiction to spending has fueled inflation across the economy, from food prices to insurance costs, but housing prices have been impacted more than nearly every other area.
The Consumer Price Index, a popular measure of inflation, shows that a consumer or business who purchased $100 of goods and services in January 2021 would have to pay $119.40 today for the same products.
Biden’s war on fossil fuels has also played an important role in driving up housing prices. When energy prices rise, they increase the cost of harvesting, manufacturing and transporting the supplies and tools needed to build homes, increasing home prices in the process.
The Biden administration has repeatedly pledged to move the U.S. economy away from oil, natural gas and other affordable fossil fuels, a promise it has kept through a series of international agreements and regulatory actions.
Biden has substantially limited offshore oil and gas leases. His administration also stopped selling onshore oil and gas leases on federal lands, until a federal court ruled that the policy was illegal. Although Biden has since restarted selling leases, his administration has also dramatically increased fees while decreasing the acreage available for drilling.
In April 2024, alone, the Biden administration restricted drilling and mining in Alaska and issued new regulations that would force oil companies to pay at least 10 times more to drill on lands owned by the federal government.
These and many other policies have sent a clear signal to fossil-fuel companies: Biden and congressional Democrats are committed to killing most forms of traditional energy development.
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As a result, many energy companies have scaled back operations, compared to pre-pandemic levels, and they have kept prices high. And why wouldn’t they? Biden is dead set on destroying the entire industry. They need to earn profits now, while they still can.
Biden’s anti-fossil-fuel agenda has made energy much more expensive than it was during Trump’s time in office.
For example, when Biden entered the White House in January 2021, the average price of gasoline was $2.32 per gallon. Last month, it was $3.73, and it hasn’t been lower than $3.00 since April 2021.
Electricity prices have also soared to all-time highs under Biden. Consumers and businesses are now paying nearly 28% more than they did when Biden took office.
These surging prices have contributed to higher costs for homebuilders, increasing home prices.
Higher housing prices, higher mortgage rates, and little hope for improvement in the near term — that’s the real impact of Biden’s radical economic agenda.
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