Biden's Inflation, Housing Costs, and Lentils

The rise in mortgage rates combines with soaring underlying home prices to create a brutal spike in overall housing costs under Biden, for owners as well as renters.

Bloomberg News sparked a much-deserved backlash by posting an absurd and insulting article detailing advice on dealing with the worst inflation in forty years in America. The Bloomberg battle plan targets those making less than $300,000 per year, apparently Mike Bloomberg’s idea of the working-class demarcation line in America? Mike’s platform for Americans stressed about runaway prices: take the bus instead of driving and substitute lentils for meat.

In Bloomberg’s America, you cannot exercise your God-given right to armed defense, but you can have all the lentils you like. Have at it, poors!

With just the right spices, those lentils will taste just like a ribeye.

Of course, cooking those lentils requires a stove…in a kitchen…in a house or apartment. Unfortunately for Americans right now, Housing prices absolutely soar because of Joe Biden’s policies.

On Monday, Fed Chairman Jerome Powell acknowledged this broad, piercing reality which already confronts every American. Most media reports concentrate on the leaps in fuel and grocery costs, but the monthly sting of rent and mortgage payments will likely prove even more painful – and stickier -- for tens of millions of citizens.  

Powell at least ditched the whole ‘inflation is transitory’ garbage and admitted that “inflation is much too high.” But, Powell also conceded that the Fed is “not expecting much near term progress on inflation.” These comments sent interest rates spiking, with yields on 2 Year Treasury Notes rising above 2% for the first time since 2019. In response, the nationwide average for a 30 year fixed mortgage also rose dramatically, surging to above 4% for the first time in three years.

Here are some of the numbers. According to Zillow, the total monthly mortgage payment in America just hit an all-time high, at $1,230 per month for an average home with a 30 year mortgage. That payment represents a startling 36% increase year over year, and a 6% increase just since January.

Even using a comparison point of the red hot pre-pandemic economy under President Trump, this current $1,230 monthly outlay is still a whopping 28% higher than the Zillow average mortgage of $962/month 3 years ago in 2019. For those who can actually afford a down payment, the monthly nut of home ownership becomes truly onerous thanks to Biden’s inflation – a toxic combination of rising prices for any tangible good, including housing, plus a sharp increase in the costs of financing that expensive abode.

For those who cannot afford to own, or choose to lease, the scenario is equally as dire. For the full year 2021 under Biden, the average rent for apartments vaulted higher by an astounding 18%, according to ApartmentList.com. As shown on this chart, that increase dwarfs the contained, steady rates of increase in recent years. By comparison, apartment rents rose only a modest 3% in 2018 and 2% in 2019, even with a stellar pre-virus economic boom.