August 19, 2024

Permission to republish original opeds and cartoons granted.

Kamala Harris’ $25,000 first-time homebuyer subsidy and 3 million new homes with building tax credits will fuel housing inflation—just like the housing bubble

By Robert Romano

Vice President Kamala Harris’ campaign has unveiled a new scheme to facilitate home building and home purchases with hundreds of billions of dollars of subsidies, including a $25,000 first-time homebuyer subsidy, said by the campaign to cost $100 billion to facilitate 1 million first-time home purchases a year over the next four years.

Additionally, Harris wants to expand homebuilder tax credits to facilitate construction of an additional 3 million new units over that time.

Similar incentives are already used by Congress via the Department of Housing and Urban Development and the Department of Treasury to facilitate home and apartment construction and renovation, including $3.3 billion of community development block grants, but what Harris is proposing is much larger.

In the 2000s, underwriting standards were reduced to facilitate an expansion of mortgage loans to homebuyers. a massive injection of credit as mortgage debt nearly doubled from $4.9 trillion in 2003 to $9.29 trillion by the end of 2008, according to the New York Federal Reserve data, as home prices jumped a gargantuan 40 percent according to the Freddie Mac Home Price Index. The number of mortgage holders had skyrocketed from 80 million in 2003 to 98 million in 2008. From 2003 to 2007, more than 9 million new privately owned units were put onto the market.

Afterward the financial crisis — which was created by overproducing homes leading to prices to eventually collapse (by more than 26 percent by 2011) and the last homebuyers in the bubble to be left with negative equity that many chose to be foreclosed upon rather than pay because they couldn’t afford to sell — mortgages settled back down to about 80 million mortgages with about $8 trillion of mortgage debt by 2013. Homebuilding also slowed down, with only 4.3 million new homes constructed.

There it remained relatively stable at about 80 million mortgages, but home prices once again appreciated from their bottom in 2011 by about 38.8 percent through the end of 2016, with still 80 million mortgages with mortgage debt reaching $8.5 trillion. And the pace of homebuilding picked up again, totaling 3.3 million from 2014 through 2016.

Further, from 2017 to Jan. 2021, home prices again appreciated another 32 percent, the number of mortgages reached 81 million and mortgage debt increased to $10 trillion. From 2017 to 2021, another 5.1 million new homes were constructed.  

Finally, since Jan. 2021, home prices continued accelerating, up another 32.3 percent as the number of mortgages has jumped to 85 million and mortgage debt is now up to a whopping $12.5 trillion as another 6.4 million new homes were constructed, although, new private owned homes built has been dropping each of the past 3 years from its 2021 peak of 1.6 million to 1.4 million in 2023 and averaging 1.35 million in 2024 so far. Usually, home construction slows down leading into recessions, which Harris is desperately hoping to avoid until at least after the election in November.

But now, prices have gotten so high, thanks in no small part to the $7 trillion printed, borrowed and spent into existence during and after Covid, that the rate of existing home sales are plummeting, just like they did in the 2000s. In Jan. 2021, existing home sales were at a seasonally adjusted, annualized rate of 6.69 million units sold. Whereas, by June 2024, it is all the way down to an annualized 3.89 million units sold, as 41.8 percent decrease.

So, home building is up, but now home buying is down but there’s still a lot more mortgages. That means there is no supply shortage.

The reason is not because of a lack of subsidies, it is because personal incomes have in no way kept up with the rising costs of housing, only up 18.2 percent compared to home prices’ 32.3 percent. Additionally, 30-year mortgage interest rates have more than doubled since 2020, and with it, monthly mortgage payments on the same unit of housing if purchase now has similarly more than doubled.

It is into that mix that Harris wants to pour in hundreds of billions of dollars of more subsidies for both home building and first-time homebuyer downpayments, essentially a mortgage origination subsidy bringing the number of mortgages to about 90 million and beyond, the highest levels seen since the housing bubble popped, at a time when incomes are not keeping up with inflation.

Here’s a hint. A house that was worth $250,000 in Jan. 2021 is now worth $337,000. Harris wants to give the homebuyer for that existing home a $25,000 subsidy, knocking the principal owed down to $312,000. And they’d be paying about 6.8 percent in interest payments. In 2021, with interest just 2.65 percent, that same unit only cost $1,007 a month when it was worth $250,000.

So, instead of the current $2,192 a month owed for the mortgage payment on that same unit, despite hundreds of billions of subsidies in the Harris scheme, even if the prices of homes magically remained frozen which they won’t, the monthly payment drops to $2,096 a month. Wow.

All that to keep the housing expansion going, as home prices keep appreciating, and as interest rates remain high, postponing a recession that will almost certainly come anyway, only with the potential of home prices collapsing like they did in the 2000s, wiping Harris’ Democratic Party out in the 2026 midterms should she win and likely in 2028 when she hopes to get reelected.

Or we could just eat the recession now, unemployment will go up, yes (it already has by 1.47 million since Dec. 2022), but interest rates will also come down all on their own, thereby reducing monthly mortgage payments, facilitating refinancing and making first-time home purchases more attractive, allowing a more virtuous cycle to ensue. Choose your poison.

Robert Romano is the Vice President of Public Policy at Americans for Limited Government Foundation.

To view online: https://dailytorch.com/2024/08/kamala-harris-25000-first-time-homebuyer-subsidy-and-3-million-new-homes-with-building-tax-credits-will-fuel-housing-inflation-just-like-the-housing-bubble/

Kamala Harris: The Left’s Manifested Candidate

By Rick Manning

Manifestation is the idea that if a person wishes something to happen hard enough, they can make it a reality.  

The left loves the idea of narratives creating reality, rather than being tied to objective facts, and the past month of the non-existent Kamala Harris presidential campaign is their real-world attempt to wish their hand-chosen person into the Oval Office.

The establishment media is running flattering Time Magazine covers of Harris promoting her as a visionary leader, and claiming that she is running a “joyful” campaign.

They have buried Harris’ culpability for the 10 million illegal aliens who have entered the country since she became the Border Czar at the direction of President Joe Biden.   Nope, that never happened, pay no attention to their own reporting in 2021, believe them now.

And of course, most of the media seems perfectly content with Kamala Harris completely ignoring them for the past month, so her own words didn’t get in the way of the re-branding to a moderate visionary.

Even the single-name designation of Kamala is an overt stroke to put the invisible Vice President and candidate into the same stratosphere as Beyonce, Cher and other divas who are single-name famous.

In light of this exaltation of the former senator from California and current vice president, the puzzling question is why she wasn’t deployed for the past three and a half years by the Biden administration to sell his and her policies, which have fallen flat with the American public?

The reason she wasn’t barnstorming across the nation, drawing crowds and creating excitement for the radical Biden agenda is simple – she was and is an even worse spokesperson-advocate than even the enfeebled President Biden.

Known for confusing word salads that are designed to make her sound smart, while actually revealing her to be vacuous, Kamala Harris’s great hope is that no one will actually force her to campaign hard over the next 80 or so days. Just like her predecessor, the Democrat elites and billionaires who chose her are hoping to fool enough of the public to elect her.

Just listen to or read this explanation of the internet cloud by Harris, “No longer are you necessarily keeping those private files in some file cabinet that’s locked in the basement of the house. It’s on your laptop and then it’s therefore up here in the cloud THAT EXISTS ABOVE US (emphasis mine), right? (while nodding her head to someone off camera)  It’s no longer in a physical place.”  

Apparently the massive data centers which are popping up around the country to house the computer servers needed to hold the data are a mystery to Harris, who has proven one thing if nothing else.  

She is no Al Gore.

But those who actually do understand manipulating the web are working overtime to erase and change her record and persona. Her campaign is putting ads up on Google which feature columns written about Harris, but contain made-up headlines to make it appear, at a glance, that she is an amazing figure who has risen seemingly out of nowhere.

It would be funny if it weren’t such a blatant manipulation in the hopes of manifesting a presidency simply by burying the truth and replacing it with a fairy tale narrative that only occasionally brushes against the truth.

But what would you expect from a hand-picked candidate whose ascension negated the votes of 14 and a half million Democrats all in the name of saving democracy?

We are in a world where the end justifies the means for those on the left who cravenly seek power at any cost, so turning a history of far left crazy into a benign face of the future just seems natural to the billionaires and elites who elevated her.

The only question remaining is whether the American public will fall for it and in doing so put a knife to the heart of the idea that elections are an exchange of ideas rather than simply a competition between those who are shilling for Burger King versus those trying to get you to eat at McDonald’s.

Rick Manning is the President of Americans for Limited Government. 

To view online: https://townhall.com/columnists/rickmanning/2024/08/18/kamala-harris-the-lefts-manifested-candidate-n2643506

VIDEO: How Trump Will Defy All Odds

In this episode, we dissect the political landscape, highlighting Donald Trump's underestimated strength and Kamala Harris's ever-more-apparent weaknesses. We explore the legacy media's psychological warfare, under-sampling in polls, and the internal strife within the Democratic Party, as showcased in a chaotic pro-Palestinian protest in New York City. Additionally, we delve into allegations against Kamala's running mate, Tim Walz, for overstating his military rank, and JD Vance's skillful confrontation with corporate media tactics. We also examine Harris's controversial price control proposals and celebrate Trump's groundbreaking social media interview record. Join us for an in-depth analysis of these unfolding political dynamics.

Watch Now: https://www.youtube.com/watch?v=8bB4TbL67TQ