It's a kitchen table election and that's the subject of the riff. Heading toward the CNN Presidential Debate next Thursday, one would think former President Trump would be pulling together a scathing critique of President Biden's performance regarding that old political cliché, kitchen-table issues, which surfaced again in the form of today's affordability crisis for working folks regarding housing.
Things like inflation, groceries, gas prices, etc. – and I'll get to those in just a moment, but there's an underrated issue which is looming larger and larger and that is unaffordable housing.
Existing home sales for May came in just over 4 million units, which is the lowest in thirty years. During the Trump years, home sales were running around 6 million. Meanwhile, average home prices came in at $419,300, and that is a record high going all the way back to the recorded data beginning in 1999.
MILLIONS OF AMERICANS ARE FLEEING TO RED STATES FOR LOWER HOUSE PRICES
Pre-pandemic, during Mr. Trump's term, home prices were running $270,000-plus and one of the keys to the unaffordable housing affordability crisis is the mortgage rate that has been running pretty consistently around 7% during the Biden years compared to below 4% during the Trump years.
Yes, it's quite true that all these zoning-related regulatory burdens imposed by blue-state Democrats have limited the available supply of homes and it’s also true that a lot of those same blue-state Democrats want to incorporate the suburbs into the cities in order to build public housing and force crazy climate change regulations. Anything to stop gas-powered autos and basically destroy the value of your home.
Even in the healthier red states, sky-rocketing mortgage rates and home prices have made it very difficult, if not impossible, for working folks of any color or stripe to afford to buy a home -- and in particular that includes younger folks.
Not enough has been written about this from a political standpoint, but it sure should come up in the CNN Presidential Debate next week and, remember, high inflation and borrowing rates have squelched middle- and lower-income purchasing power.
It's a familiar litany but worth repeating: the level of consumer prices has jumped 20% under Mr. Biden. Grocery prices have jumped 21%, gasoline 45%, electricity 28% and new and used cars and trucks about 20%, and on and on.
Weekly wages for the typical family have not kept up with prices, with a net-drop of over two percentage points over three and a half years. In other words, workers have not had a pay raise, they've had a pay cut. If you throw taxes in, their take-home pay has dropped even more.
Back to the kitchen table, where in so many families it is the woman of the house who handles the checkbook and the credit-card balances. Whoops. Besides a 7%-plus mortgage rate, factor in a roughly 10% auto loan rate, with huge insurance costs, plus up to 25% or 30% credit-card rates.
None of these borrowing costs are baked into the consumer price index, but they are baked into the kitchen table affordability crisis.
You can't take GDP to the store, but take-home pay, mortgage rates and a generally discouraged middle class suffering from an ongoing affordability crisis is going to be front and center at the CNN Presidential Debate next week.
This article is adapted from Larry Kudlow’s opening commentary on the June 21, 2024, edition of "Kudlow."
