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'American Dream' now unaffordable to most Americans

By John Adams
Published  October 17, 2023 8:13am EDT
John Adams
FOX 5 Atlanta

Inflation causes problems for housing prices

American housing is becoming increasingly unaffordable, with home prices rising faster than incomes. Real estate expert John Adams gives his take on the problem young homebuyers are facing.

American housing is becoming increasingly unaffordable, with home prices rising faster than incomes. This trend is having a devastating impact on millions of Americans, making it difficult for them to buy a home, rent an apartment, or even afford basic necessities.

Fox 5 Real Estate Expert John Adams is pointing the finger of guilt directly at our national debt and the inflation that debt has caused.

When the government spends more than it takes in, it borrows to make up the difference. The debt, therefore, can be seen as the accumulated sum of previous years’ deficits that is still outstanding.

Currently, we, owe just over $33 trillion.

It’s easier to understand if we chop off eight digits and think of a family budget:

  • Family Revenue: $43,328;
  • Family Spending: $62,706;
  • Credit Card: $19,425;
  • Card Balance: $335,617;
  • Recent Budget Cuts: $250.

If this was your household budget, you'd have a real problem.

When the government spends more money than it takes in, it leads to inflation. Inflation is a general increase in prices and a decrease in the purchasing power of money. When inflation is high, it can make it difficult for people to afford basic necessities, including housing.

Why does this matter? There are three reasons:

1. Inflation makes everything more expensive. The Federal Reserve thinks the only way to combat inflation is to raise interest rates.  Mortgage rates have almost tripled in the past 18 months.

2. Homeownership is one of the most important ways for Americans to build wealth and achieve financial security. Unfortunately, the rising cost of housing is making it increasingly difficult for people to afford to buy a home, especially first-time homebuyers.

3. The United States already spends about the same amount every year on interest payments as it does on defense. And it’s getting worse every year. Both Republicans and Democrats do it, and when you try to borrow to buy a house, you are competing with the United States Treasury

Adams says the solution is to balance the budget.

By raising taxes or lowering government spending, inflation will be reduced and make housing more affordable for everyone.

Inflation is fast turning the American Dream of homeownership into a nightmare, and it’s devastating the lives of millions of Americans.  There are a number of things that can be done to address this problem, but it will require discipline from both Republicans and Democrats.  That is a quality that has been in short supply for the last 50 years.

Atlanta native John Adams has been a real estate broker and investor in residential real estate for the past four decades.