The National Association of REALTORS® reported in October that increasing costs of rents are making it hard for would-be homebuyers to save for down payments. Rent prices are approximately 4 percent higher than a year ago and have been on an upward spiral since 2007. These first-time homebuyers who typically lead in the percentage of homeowners are at 30-year lows.The NAR report goes on to say that rising rents make it especially difficult for potential first-time homebuyers because the rent increases are outpacing wage gains. National Assoc of REALTORS on RENTS
Weak wage growth has been a consequence of decade-long subpar economic growth but income inequality has been rising since 1980, according to the Economic Policy Institute reporting. EPI on Stagnant Wages
Concerns that high manufacturing wages in the U.S. are causing growing job losses and declining U.S. competitiveness are common but incorrect, says EPI. The report cites Germany’s manufacturing wages, the highest in the world. Their economy has remained stable even in the face of competition from China. While U.S. manufacturing declined by 31 percent between 1997-2013, Germany’s fell by only 4.7 percent. EPI on Manufacturing Wages and Jobs
The New York Times reported in November on the resiliency and recovery of the U.S. economy from the worst of the Great Recession of 2007. It also reports the economy is being held back – hence, the real estate market, as well – by what governments at all levels have failed to do.
Specifically, the Times cites productivity-enhancing investments that would counter the downshifts still being experienced. Such investments, they say, should include spending for education, transportation, environmental protection, science and other fields. The report goes on to say that laying a foundation for future growth would include enacting policies to ensure that pay and profits from enhanced productivity are broadly shared, rather than concentrated at the top of the income-and- wealth ladder. Such policies would include strict anti-trust enforcement, steeply progressive taxes, a higher minimum wage and support for labor unions. New York Times on Stagnant Wages
The EPI report says additional policies should include increased spending on research and development and infrastructure. Internationally, they say the U.S. manufacturing sector could be rebuilt by fighting currency manipulation and unfair trade.