It would be a huge oversimplification to say that mishandled mortgages ruined the economy for about a decade. All the same, we are still feeling the effects of a recession caused in large part by improper manipulation of the housing market. As we enter 2019, some sources are saying we have finally pulled ourselves out of the hole that was dug. Mortgage rates are going down; more people are ostensibly keeping up with their payments. Some would say we can finally call it a day on the housing crisis. However, not everyone is as convinced. Promising numbers do little to change the fact that suitable low-cost housing options are dwindling more every year. This is a combined effect of the increasing cost of housing as well as the failure of low rent housing projects. Worse yet, the income of those renting housing has not gone up at nearly the same rate as housing cost increases. Over the last fifty years, renters income has increased about five percent, while homeowners earn about fifty percent more. The cost to rent has gone up a staggering 61 percent and homeownership has gone up 112. This is all on top of rises in unemployment and more specifically underemployment. We are only just starting to turn the unemployment ship around.

Why Is Housing So Much More Expensive?

One of the main answers is so simple that might easily be overlooked. America has stopped building houses. Supply and demand, when you have a lot of something (usually) you don’t charge as much for it. When there’s less to go around, you can hike the price. While there is truth to the idea, “There’s only so much space to go around,” this isn’t actually the problem. In fact, there are actually fewer homes than there were in 1982 with the population sharply rising in the intervening time.

The Effect on Cities

There is a cyclical effect of housing shortages, housing that is too expensive, and people buying fewer homes in cities. Believe it or not, cities are becoming too expensive for people to afford to live in. The cost of living in every major American city is well over the minimum wage at both the state and national level. Beyond that, the cost of living is higher than what the average citizen makes in that area even about minimum wage.

The Effect on the Future

Higher housing costs coupled with incommensurate income has disproportionately affected younger Americans. It pushes back their home ownership by decades. If things continue as they are (which they show every indication of doing) older Americans will continue to enjoy the equity of the homes they acquired before this mess started. This will lead to even more expensive living costs that younger people are already less equipped to deal with due to underemployment. It could cause a crash much worse than the damaged housing market we’ve already been dealing with.


Frankly, there aren’t many realistic solutions at this point. As those who are in positions of wealth and power are currently benefiting off of all of this, many aren’t even willing to admit there’s a problem.