How the “Affordability Crisis” Migrated from High-Income Rental Markets, as Manhattan & San Francisco, to Lower Income Markets, as Detroit & Fresno

The distortions caused by the shift to working from anywhere are hitting households that can least afford it.

By Wolf Richter for WOLF STREET.

For months, we have seen in the data how the large-scale shifts coming out of the Pandemic have impacted the housing markets around the country. In terms of rents, tenants have left big expensive places, such as San Francisco, Silicon Valley, Boston, or Manhattan, thereby leaving behind high vacancy rates, plunging rents, and massive churn by the stayers-behind that are chasing that free upgrade to a nicer apartment, as landlords are trying to keep their units filled.

And we have seen in the data that this outflux has created, conversely, a large-scale influx in the destination places, usually less expensive markets, and have driven up rents in those markets.

But there is a troubling component to this shift. Rents are plunging in places with some of the highest household incomes, and they’re soaring in places with much lower household incomes, thereby shifting the housing affordability crisis to people who can least afford it – and it has done so in a matter of months.

The table below lists the 16 counties (of the 100 largest counties) with year-over-year rent declines in February between 10% and 24%. It also shows the median 1-BR asking rent and the median household income, based on a new study by Zumper on the affordability issues that the shifts have caused.

Just to make a point about nothing being universal, there is also a county on the list with a large year-over-year rent decline and one of the lowest rents and one of the lowest household incomes in the US ($41,800): Hidalgo County in Texas.

In terms of median household incomes, San Francisco ($124k) and the Silicon Valley counties of Santa Clara ($133k) and San Mateo ($138k) top the list, and they also top the list in terms of rent declines. For these folks that stayed behind, renting has gotten a lot less unaffordable, so to speak. (If your smartphone clips the sixth column on the right, hold your device in landscape position).

1-BR rent Y/Y % HH Income
1 San Francisco County CA 2,663 -24% 123,859
2 Santa Clara County (Silicon Valley) CA 2,196 -21% 133,076
3 Suffolk County (Boston area) MA 2,000 -20% 77,558
4 San Mateo County (Silicon Valley) CA 2,195 -19% 138,500
5 Kings County (Brooklyn) NY 2,108 -18% 66,937
6 New York County (Manhattan) NY 2,955 -17% 93,651
7 Middlesex County (Boston area) MA 1,918 -17% 107,056
8 Hudson County (along Hudson River, facing Manhattan) NJ 1,900 -16% 78,808
9 King County (Seattle) WA 1,595 -15% 102,594
10 Queens County (Queens) NY 1,825 -14% 73,696
11 Hidalgo County (McAllen, border) TX 605 -13% 41,800
12 Norfolk County (SW of Boston) MA 2,095 -12% 107,361
13 Alameda County (Oakland) CA 1,995 -11% 108,322
14 Lake County (Chicago area) IL 1,235 -11% 92,511
15 District of Columbia DC 2,107 -11% 92,266
16 Hennepin County (Minneapolis) MN 1,260 -10% 82,369

And most of the 16 counties that had year-over-year rent whoppers between +10% and +22% are the ones with relatively modest median household incomes, compared to the most affluent counties. Particularly stunning is the 22% rent surge in Detroit and Indianapolis where median household incomes are at the low end of the spectrum, and this is going to hurt.

 1-BR rent Y/Y % HH Income
1 Baltimore County MD 1,445 22% 77,358
2 Wayne County (Detroit) MI 1,050 22% 50,753
3 Marion County (Indianapolis) IN 996 22% 50,458
4 Pierce County (Tacoma) WA 1,450 21% 79,243
5 Fresno County CA 1,175 21% 57,518
6 El Paso County CO 1,150 16% 72,830
7 Kern County (Bakersfield) CA 925 16% 53,067
8 Oakland County (Detroit area) MI 1,109 16% 81,190
9 Monroe County (Rochester) NY 1,160 14% 62,103
10 DeKalb County (Atlanta) GA 1,452 13% 63,652
11 San Bernardino County CA 1,550 13% 67,903
12 Shelby County (Memphis) TN 950 12% 52,614
13 Gwinnett County (near Atlanta) GA 1,283 10% 72,109
14 Duval County (Jacksonville) FL 1,005 10% 58,415
15 Bexar County (San Antonio) TX 970 10% 58,964
16 Sacramento County CA 1,425 10% 72,017

There is another element here. Some of the counties on this list are geographically near very expensive housing markets with high household incomes, such as the counties of Kern and San Bernardino to the Los Angeles and San Diego urban areas; or the counties of Sacramento and Fresno to the San Francisco Bay Area, indicating that people move to less expensive cities that are within a few hours’ drive from where they used to be.

Given the huge populations, such as in New York City, Los Angeles, or the Bay Area, they can easily distort the rents in smaller less expensive markets. And as rents drop in expensive cities and soar in cheaper cities, the difference between the two collapses to where at some point, the move isn’t worth it anymore.

The chart shows the difference between 1-BR rents in San Francisco and Sacramento, which has collapsed by 50%, and the difference between 1-BR rents in San Francisco and Fresno, which has collapsed by 46%:

What has essentially taken place is a shift of renters from the most affluent counties to the less affluent counties, and once that shift started gaining momentum, rents surged in those receiving counties.

Some of these people who moved retained their jobs but had shifted to working from anywhere; and they brought their high household incomes with them, and they’re used to the much higher rents in their expensive markets, and they’re bidding up the rents and they still think they’re getting a deal.

But at the receiving end of these shifts are renters with relatively modest household incomes that now have to compete with an influx of renters with high household incomes, and they’re now facing massive and unaffordable rent increases.

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  253 comments for “How the “Affordability Crisis” Migrated from High-Income Rental Markets, as Manhattan & San Francisco, to Lower Income Markets, as Detroit & Fresno

  1. Depth Charge says:

    This housing bubble is the most destructive thing I have ever seen in my life. I cannot even describe how many homeless people I see now. They’re everywhere. It’s disgusting, and I don’t even hear a single politician mentioning it.

    • Yozíme Río says:

      For the people who don’t care about inequality… How much must the increase be in dollars terms to price a working-class, low middle-class person/family out of the market? $100? $200? $300? Maybe I’m wrong, but when tax brackets reached over 90% for some, the USA seemed to be a better place to live in.

      • California Bob says:

        You’re not wrong.

      • timbers says:

        Republican Dwight Eisenhower’s tax rate was 91% if I’m not mistaken. And what you just wrote ties into my sentaiments expressed below that the world might be a better place for if we taxed the rich out of existence. Hardly a new concept, dates back to the bible at least. Yet funny you never hear about it in the corporate US media.

        • Yozíme Río says:

          Funny to see so many people on the right complaining about Bezos and Gates… Well, you know, I’m not on the right, but I hate to see Bill Gates monopolizing certain discourses regardless of his positions or what he says. Money is power, and a society cannot afford that certain individuals achieve so much of it to the point that, if not directly, at least through their huge influence they could or can dictate policy. If Americans continue to believe that this is a country rule by “the people” they should think seriously who are “the people”. Billionaires aren’t “the people”. They’re part of the people (simple set theory), but their money has made “the people”. Everything is geared to bribe and protect their wealth.

        • Absur Ditty says:

          Yozíme Río I appreciate your nostalgia for the good old days but 90% tax bracket is not going to work nowadays. We need tax brackets that stretch to the level of the heroic imagination of our senators and Federal Reserve heroes. What I’m saying is that for the ultra rich, you know, anyone earning over $120k (because if you look at it from a global perspective, $120k is filthy rich) the tax bracket should be OVER 100%. That’s right! 105% tax bracket, 120% tax bracket, 150% tax bracket etc.

          This will really make people think twice about earning too much money!

          Now at the lower end, we can do NEGATIVE income tax brackets. This has already been proven to eliminate poverty so we just need to do more of it now that poverty is back! So basically if you earn just $1, we should do -3000% tax bracket on your first dollar, then it starts stepping rapidly toward zero. Imagine if you told someone not working, that if they could earn just $1 they’d get a $3,000 tax refund! Literally everyone would have a job then! (Remember you heard of this here from absur ditty first!) Then you know, for the next $999 a -200% tax bracket, then the next $10,000 -100% tax bracket.

          With a little effort the government could actually manage this so that everyone get’s the exact same income! Wouldn’t that be wonderful! Perfect equality for the first time!

        • Yozíme Río says:

          Absur, who wants equality? Is that equality that you propose “just”? Even Marx would be against your proposal: “from each according to his capacity, to each according to his work”.
          A society should set up its priorities, and if taxes are the mechanism to fulfill them, so be it. Inequality is a problem, a practical problem that, when extreme, leads to disfunctionality, as we see, and eventually to destruction? That doesn’t mean equality, something unreal, should be the solution.

        • Nacho Libre says:

          Thanks Absurdity for the fitting response.

          These 91%ers have no f’in clue on consequences and adaptations.

          They assume when marginal tax rate goes up to 91%, everything else will remain the same – that businesses will remain and operate at same level, people will continue to take extraordinary risks even when return on that risk is just 9%, and other absurd things.

          These folks don’t even calculate how little that additional income tax will bring in. They just peddle fallacies, bring down businesses, cause job losses and feel virtuous in their ignorance.

        • Swamp Creature says:

          If the tax rate were raised to 90% the rich would just move all of their funds into investments that don’t produce income. They would buy muni bonds, tax shelters, etc. You would actually raise less revenues because they would game the system and pay nothing and feel proud of the fact they did that.

          I feel that I’m overtaxed already. I pay 22%Fed + 7 1/2%MD + 15.3% SE tax. If you raise my taxes one more dime I’ll find a way to restructure my investments and assets to avoid paying more and not feel one sense of guilt for doing just that.

        • RightNYer says:

          Swamp, I feel the same way. Ever since the people voted to steal my money to give themselves $2,000, I wouldn’t feel one iota of guilt for taking an “every man for himself” approach myself.

        • Yozíme Río says:

          Neither nostalgia nor 91%. I’m a materialist, therefore, I don’t believe in dreams such as “going back to the letter of the original Constitution”. For that we would need to bring back slavery, the British Empire, the Indian Wars and probably Shay’s rebellion.

        • Nacho Libre says:

          @Swamp, you forgot sales tax, gas tax, tolls, property tax, utility tax. I bet you are paying 50% of your earnings in various taxes.

          For some it’s not about the numbers, only about whether the level of taxes are ‘fair’. What level is ‘fair’? That’s deliberately left out or not even thought out.

        • Swamp Creature says:

          I’ve already started re-structuring my investments for tax avoidance. Why bust my f%ckn a$s working in the DC Swamp just to pay it all back to the government who wastes most, if not all the money on boondoggles, income redistribution, and paying people not to work, for closed schools, and teachers that don’t want to teach.

          All contractors that I hire to do work on my house and yard are all paid in cash. Yes, green Jerome Powell/Janet Yellon fake U.S. worthless currency. Contractors even give me a big discount for doing so. I wonder how much of that income is reported.

          Yep, you guessed it. Zeeeeeeeero. Hurray for them.

          All excess funds go into short term tax free muni bonds funds, where I don’t pay any Federal taxes, period.

          I’ve got many others.

      • Stephen C. says:

        Absur Ditty,

        The people who are concerned with wealth inequality are asking for a better tax code and less rentiers, less interest rate and market manipulation. They are not necessarily asking that the government have everyone earn the same income. You’re just riffing on the words equality/inequality to distort the issue. Were you one of Rush Limbaugh’s writers?

        • Absur Ditty says:

          Thx for reading.

          By pushing the stated tax policy preference for high marginal rates to absurdity- hence my pen name- people have thought about the unintended consequences of these failed policies. in truth I do not believe that tweaking the current failed system will have any desired effect and all these programs greatly embolden the marxist/bolshevik/looter elements of society.

          In truth, my preference to address the gilded age – like features of the USA today and address inequality is to
          1) repeal the 16th and 17th amendments
          2) re-establish the limits to federal power on the constitution which would immediately end 90% of what the fedgov is involved in today, and immediately crush thousands of rentier and monopoly schemes. Do this via electing officials who actually care about the constition and setting aside 2 generations of ridiculous, corrupt illegiimate supreme court rulings
          3) Let people preach and practice virtue as they see fit

          And no I don’t give a damn about Rush Limbaugh. As far as I can tell the so called conservatives have accomplished nothing in the last 30+ years other then making a bunch of noise while doing a frenemy act with the so called liberals as the liberals and conservatives together nourished the most intrusive abusive federal govt ever imagined in the USA.

        • RightNYer says:

          Absur Ditty, as long as the 19th and 24th Amendments are in place, we’ll repeat all of the mistakes again, even if all of your suggestions were implemented.

      • Finster says:

        The growth of the wealth gap is more a function of interest rate policy than tax policy. If you look at a long term chart of the wealth gap, it’s grown almost in lock step with the decline in interest rates over the past four decades, and virtually exploded since the Fed cut rates to zero after the 2008 crisis and held them there for years. Lower rates on assets mean higher prices, so this policy makes the rich richer while doing little for average Americans, except possibly tempting them deeper into debt. Fed Chairman Ben Bernanke even made targeting the “wealth effect” an explicit policy strategy after the crisis.

        This policy is facilitated by virtue of most of the mainstream media giving it little attention, except possibly in the context of an approving tone as it cheers its stoking of stock prices and house prices. While the media talk about how tax policy might trim a little off the top and let some trickle down the wealth gradient, the Fed operates in the shadows, funneling trillions in the upstream direction, minting billionaires by the truckload while the rest struggle.

        • Yozíme Río says:

          Which is true. My point is just to clarify the difference between liberal and neoliberal capitalism. The destruction of the State’s got to the point that economic policy is in the hands of the FED… That thing whose position in the whole scheme of institutional structure is never clear, acting with total independence from The People -supposedly the Sovereign.

        • Yozíme Río says:

          I meant “the destruction of the liberal State”.y

    • Scramjett says:

      If I were to ever hear a politician express legitimate concern for the plight and well being of the homeless, I’d be so shocked you could knock me down with a feather. The pols don’t really GAF about anyone but themselves and their wealthy patrons. That’s why you also won’t hear them talk much about the housing crisis. They’re benefiting from it big time!

      • Nacho Libre says:

        For a politician any crisis is more useful unsolved than solved. Housing crisis, immigration crisis, healthcare crisis, racism crisis, terrorism crisis.

        Once a crisis is solved, it can no longer be milked for votes or for campaign contributions.

        Scum of society.

    • MiTurn says:

      “Rents are plunging in places with some of the highest household incomes, and they’re soaring in places with much lower household incomes, thereby shifting the housing affordability crisis to people who can least afford it – and it has done so in a matter of months.”

      I live in podunk north Idaho and I have for the first time ever (over 20 years here) seen a guy living in his car. I have never seen a person living in a car before.

      In movies….

    • Swamp Creature says:

      Yep, they are all over the place here in the Swamp. I carry a fake wallet with some one’s and fives to give to these people when they ask for help and are near my vehicle when I’m parked. Its a small price to pay. I give them just something to get a snack or breakfast at McDonalds. I’m really starting to feel bad for these people. A lot of them are homeless Vets, many from the Vietnam era. They’ve fallen through the cracks in the social safety net.

      We are now giving more benefits to illegals and criminals coming across the southern border than to our own citizens.

      This is the Nations Capitol. This is a disgrace!

      • Swamp Creature says:

        Wolf, any idea what is causing the above comment to go into moderation? I would like to avoid this if possible. I’m trying to avoid violating your comment guidance. Still learning.

        • Wolf Richter says:

          Don’t worry about it. And don’t try to “avoid this” because it produces really funny comments when people are trying to avoid certain imagined or real trigger terms. Just write normally, and if it ends up in moderation, be patient. Thanks!

        • Swamp Creature says:


          I’ve haven’t hosted a Website since early 2001 right after 911 when my Web hosting service went bankrupt and know nothing about advertising on one now. This is one area where my computer skills have seen better days. If you could say something generally about those ads on your Website it would be helpful. As you said before they are not pop-ups (which take over your whole screen, and I never click on). They seem well organized around your comment text and don’t interfere with it, and don’t hurt the performance of my machine which is a very good thing. I was thinking up clicking on several of them now. Are they pretty safe as far as not downloading malware? Just curious and want to make sure.


        • Wolf Richter says:

          None of the ads on my site should be malicious. I think they’re safe to click on. That is one thing the ad industry is trying to keep very clean. I have never encountered a problem by clicking on any ad, on any site.

      • Most of the homeless Nam Vets are dead. These folks are from the ME forever wars and what have you. This is a generation raised on drugs. There were no drugs in my HS, but that was maybe the last class to walk out clean and sober. Now the whole scene has gone Rx. Everyone reads Orwell, they should read Huxley. Our last pres was a hophead. If your kids weren’t doing their schoolwork, and they stayed up all night blasting the stereo, what would you think?

        • Swamp Creature says:

          This is so over simplified that it borders on total bull s$it. I hope I never have to read this garbage on the site again.

        • Things We Carried says:

          I think you are a heartless, inconsiderate, and know-it-all individual who needs an education in humanity. There are many Vietnam Vets still alive, maybe homeless, but there has been no census bureau toiling over the statistics. Likewise, there are many Iraq and Afganistan combat veterans now homeless or just committing suicide because of their drug habits? What you should be concerned about is why the Korean, Vietnam, Iraq, and Afghan War Vets are treated so badly by the V.A. when their needs are not being addressed by our politicians who wrap themselves in the embodiment of the principles that make America great, and safe while you sleep. Apparently, these same politicians are concerned with our new immigrants and ensuring that they receive all the benefits that working Americans and homeless veterans have provided through the usual political machinations that keep them in office. I survived the brutal battles in Vietnam, was not a drug addict, never an alcoholic, never smoked, and came home to a hostile America. Despite the hate imposed on my uniform, I managed to raise a family, graduate from a great University, and always remembered my fellow comrades who were homeless and needed a ” Good Samaritan” to lift them up with compassion and mercy so that such samaritans would provide an opportunity for them to just live their lives with a sense of dignity. I understand the reasons for being homeless, you do not because you carry no physical or mental scars that can break a man or woman from extensive combat.
          Survivor of the 25th Infantry Division

      • GirlInOC says:

        Undocumented workers are NOT eligible for housing assistance. They’re not eligible for most government assistance aside from children due to the fact we aren’t quite at the level of cold-hearted monsters (debatable, ik).

        There have been many studies showing that undocumented workers contribute into the billions in taxes and are ineligible for many of the breaks/assistance that help lower income families.

        • Petunia says:

          While illegals might not be eligible for all federal assistance, in border states they get state aid which puts them above legal residents in benefits. When I lived in Florida, they worked, got welfare and food stamps for their kids, and tax credits from the feds. They also qualified for housing grants, etc.

          When we needed govt assistance, we got $$hit.

        • Depth Charge says:

          What part of “illegal” are people missing? No other country in the world allows people to just invade their borders then offers them “free” food and healthcare on the peoples’ dime. This is bankrupting the country, contrary to the rosy picture you paint. People who think we can just open the floodgates to the worlds’ poor have absolutely zero math skills.

        • RightNYer says:

          And those “studies” neglect to count the cost of their emergency health care, the cost of their crime, and the cost of educating their children, whether born as citizens or not (because of our stupid birthright citizenship rule)

        • Del says:

          Their citizen children, refugee, or dreamer children are eligible for housing, which means de facto, the parents get to live there. Also food stamps, scholarships and other things.
          They do contribute SS taxes to fake accounts, but also send most of their cash out of the country, thus depriving small businesses of the 8 fold multiplier effect were the money to be spent locally, to create jobs, sales, taxes etc.

          The six Latin American nations in this analysis each received record high remittances in 2019, and together took in $71.5 billion last year. These high levels continued into early 2020, with remittances in January and February exceeding 2019 totals in each of the six countries.

        • Robert says:

          In New York you can get a driver’s license being undocumented. Also, they’re planning a massive aid package in New York state for the undocumented.

          Poor Americans need more competition for their rapidly vanishing service jobs!

          From the April 9-2021 Guardian

          “Undocumented workers are eligible to receive $15,600 if they can prove they are New York state residents who are ineligible for unemployment benefits due to their immigration status, “

        • Deborah says:

          You might want to check out this article in Atlantic:

          “Estimates from the National Academy of Sciences suggest that on average, each immigrant costs his or her state and local governments $1,600 more a year in expenditures than he or she contributes in revenues. In especially generous states, the cost is much higher still: $2,050 in California; $3,650 in Wisconsin; $5,100 in Minnesota.”
          “Immigrants are expensive to taxpayers because the foreign-born population of the United States is more likely to be poor and stay poor. Even when immigrants themselves do not qualify for a government benefit—typically because they are in the country illegally—their low income ensures that their children do. About half of immigrant-headed households receive some form of social assistance in any given year.

      • Mara says:

        Illegals don’t get anything. They aren’t eligible for any benefits. Vets have better healthcare then most.

        We could fix homelessness but if you thought the recent stimulus was too much you won’t like giving it to people who don’t have a job or a home.

        I can imagine the outburst from the right if we gave free housing to the homeless and I’m sure you would be the first to complain about it too. “If they are just giving away free houses I’m going to quit my job so they give me free stuff too.”

        I completely agree that housing should be free and nobody should be able to profit from it but I don’t think you would be happy with that either.

        We cold also fox this with a bill that legally guarantees a job at a living wage so as one person can get an average priced apartment. But in my city that would be $20 an hour and far above the minimum wage which cause the homelessness in the first place.

        • Misanthrope says:

          I think big-screen TVs and smartphones and rib eye steaks should be free too.

    • Wolf Richter says:

      The issue of homelessness has been surgically removed from the housing inflation years ago.

    • Gian says:

      You confuse homelessness with rising rents, rather than its true cause – drug addiction, alcoholism and mental illness. Therefore, homelessness is a choice, as is their decision to imbibe on this “journey” in the first place. Living on the street for these people is a preference, not a penance. Neither plunging rents nor government intervention will solve this problem. I have renters who “struggle” to pay the rent, yet somehow manage to purchase new vehicles. Most are renters because they are unable to prioritize their spending, have lousy credit and do not understand there are only one hundred pennies in a dollar.

      • Depth Charge says:

        False. We have an epidemic of new homelessness which has nothing to do with drug addiction and mental illness, and everything to do with the bubble in house prices and rents. You should get out more, maybe research “safe parking lots” where the working poor who live in their cars have access to port-o-potties and wash stations.

        • Erle says:

          There is a pretty big company in Wisconsin, Spancrete, that makes fabricated concrete/steel fabricated highway bridges.
          They hired an Israeli concrete guy that brought along expertise on concrete panel houses. The walls were layed up in a textured mold that would give the exterior a slatted wood look and the concrete was dyed to preclude painting. The insulation and wiring was all cast in with an interior side of the panel done to order. The whole exterior was very strong and stood on its own. Cast in fasteners held it together. The interior walls could be placed however wanted and could be moved at a later date as they were not load bearing.
          The cost was somewhat less than half of a conventional build and very low maintenance in the future, plus was quieter and substantially better on HVAC costs. The insurance costs would be far less as it wouldn’t burn.
          These could be fabricated by the less skilled which could be a neglected source of employment that are not stick build carpenters.
          It had no flaws that I could find but was nixed by the housebuilder guilds.
          Yet another example of government controlled by special interests.

      • GirlInOC says:

        Homelessness is directly tied to housing affordability. People struggling with addiction (on fixed-incomes, intermittently employed, elderly, disabled, etc) are not able to stay housed when rents increase at exorbitant rates.
        Other countries have been able to completely eliminate homelessness using a Housing First policy solution. Provide housing for the poorest among us and it is cheaper, safer, and better for everyone.

        It’s really unfortunate people still push the narrative that some people will just be homeless due to mental health struggles. It’s not even close to true. Everyone wants a home.

        • roddy6667 says:

          Before, the states had huge mental hospitals for a lot of these people. Also, SRO (single room occupancy) hotels (flophouses) provided a place to sleep out of the rain and snow for 50 cents a night. All gone now, because they are unsightly.

        • Shiloh1 says:

          Roddy, I think ‘flophouses’ were more of an open floor ‘cubical’ arrangement. Skid Row was on west Madison Street near Halsted in the good old days.

      • Petunia says:

        You don’t have a clue how the people you rent to are surviving. The car is more important to them because it helps them keep their jobs. Taking time off for car repairs leads to unemployment, lost wages, and more expense. By having a reliable car, they can always get to work, and they can live in it if they have to. Nobody wants to live in their car, but the economy has taught workers many lessons since 2008.

        Your attitude and lack of insight is what makes me support rent control. Enjoy the excess profits now, because they are going to be on the chopping block in the future.

        • Depth Charge says:

          It sounds like he’s getting stiffed by his renters and is salty about it. So he is now poking his nose around in their finances as best he can, making assumptions about what they spend their money on, etc. Maybe they got an inheritance which allowed them to buy a nice vehicle to get to work, but didn’t counsel him about it first to make sure he approved? I mean, “landlord” = “lording over tenants financial decisions,” right? Sounds like Lord Gian is getting a bit angry over his inability to control people.

        • Malthus says:

          Rent control, like any price control, will reduce supply in the long run.

        • Orangecats! says:

          I was just about to post this, thank you!

          When I was “struggling” to pay the rent I bought a new car at a usurious interest rate because I didn’t have enough CASH to buy a used one off the street which would probably break down anyway in a year and I wanted reliable transportation to get to work. He also thinks mental illness is a “choice?!”

          This guy must be a troll.

      • John says:

        Gian – as perDC, you should get out more.

      • MemeF says:

        Pretty sure if everyone on this site lost all their assets the first thing they would do is crawl into a bottle.

    • SarahG says:

      If rent prices were to somehow drop by a full 50%, 60%, 70%, how many of these homeless you speak of would be off the streets?

      None, it is not a home affordability issue it is a mental health and addiction issue. As long as it is treated as an affordability issue it will only continue to grow.

      • Wolf Richter says:

        At 70%? Lots. Most of the people living in cars and vans, and some of the people in tents would become renters. Lot’s of these people have jobs. People confuse “homeless” with the guy sleeping on the sidewalk. It’s a much broader phenomenon, and only part of it is visible on the sidewalk.

        • Depth Charge says:

          Thank you, Wolf. A lot of these commenters are living in a bubble. They need to get out more, as they clearly have no understanding whatsoever of the scope of the problem. I could link to countless articles of working people living in their cars, lots of them women.

        • DawnsEarlyLight says:

          I know of several ‘past renters’ that are now living with relatives, due to rental cost issues. Are these people considered ‘homeless’?

    • Fast GT says:

      Tell me about it, I’m in the greater Houston area.
      I’m getting text messages from “Realtors “ offering me close to 200,000.00 for a rental home that was built in 1979 by my dad for about 25 k.
      Don’t even know how they find my mobile number.
      Realtor told me that if a home is on the market more than a few days, something seriously wrong with it. What’s happening around here doesn’t compute with my simple brain.
      Oh , also Need to mention, been looking for a couple of employees for a couple of months now, no response to the ads.
      BUT , I did hear about a bill pending to allow everyone in “Forbearance “ the chance to Refi into a 40 year mortgage, anyone else hear of this?
      Surely that will fix everything, right??
      Also, the area I’m discussing is a little north of the Woodlands,Tx. , which used to be considered
      “Out in the country “ just a few years back.

      • Lynn says:

        You may be in an area where many working people have had to move. When rents go up wages must also go up otherwise working people can not afford to live there.

        Granted, many working people are living in their cars, but if LE is cracking down on the homeless then they have nowhere to park those cars for the night.

      • Anthony A. says:

        Howdy neighbor (from The Woodlands). Yes, all the way past Willis is growing quickly. I get those buy your house “offers” via text message.

  2. Drew says:

    One city that didn’t make this list is Boise, Idaho. Maybe it didn’t make the cutoff in terms of population, but it experienced a 13.5 percent rent increase y/y. No offense Wolf, but Californians have come in and destroyed what once was a great city.

    Growing up in the area in the 90s I probably saw 3 homeless people my entire life. Now there are encampments starting to grow there just like Portland, OR. While it’s nowhere near Portland or Seattle levels, the homelessness increase is astounding, and sadly it’ll only get worse.

    • roddy6667 says:

      They are in every city. Some are hidden better than others, living in encampments just outside the city. America does not take very good care of its weakest and most vulnerable.

      • Cold in the Midwest says:

        I empathize with this comment to a degree. I suppose that depends on what is meant by “good care.” Christopher Rufo on YouTube pointed out that some of the factors that cause homelessness include economic misfortune, lack of affordable housing, racial discrimination and bad luck. All of these contribute to the problem.

        However, the media rarely mentions the roles of mental illness and/or alcohol and drug abuse when discussing the homeless. One previously homeless man estimated that he observed 85% of the people among who he lived while homeless using drugs.

        I’ve also heard that some homeless people will not participate in the “care” that is offered by the cities. Any help (such as housing in a shelter) that requires them to either sober up or stop using drugs is refused.

        I don’t know the solution to this complex issue but I do think it goes beyond government assistance. Both sides of the issue must be examined when solutions are considered. The homeless have an active role in perpetuating this problem. But anyone who points that out is demonized as uncompassionate by the liberal media.

        • roddy6667 says:

          If you have spent any amount of time working with the homeless, you quickly realize that they are out on the street because of mental illness, alcohol, and drug addictions, not a lack of affordable housing. They HAD a place to live, but they abused it and lost it by spending their money on their addictions or failing to follow the rules. Decades ago there sere SRO (flophouse) hotels where they could live. Most have been torn down. Also, most states had huge residential mental hospitals for these patients of last resort. All gone now, in favor of group homes.

        • Wolf Richter says:

          Your first sentence is correct for a portion of the homeless. But there is another group that is homeless due to housing costs. They’re not the ones you see sleeping on the sidewalk during the day. Many of them have jobs. They might live in cars or vans or tents, or they might couch-surf.

        • tfourier says:

          I always love the comment – well you dont see that many “homeless” people in Europe. Thats because most of the “homeless” people on the streets of certain US cites are all in population groups that are forced by law in European countries into either mental health or drug / alcohol abuse programmes. If they refuse they eventually end up in prison.

          You dont seem them on the streets because the authorities dont allow them on the streets. The few European cities that have a more US approach to enforced treatment programmes have just as many street people as US cites.

          The numbers of street people I see on San Francisco streets has ebbed and flowed with the enforcement of quality of life laws. When the laws are enforced they mostly disappear. Move elsewhere. When the laws are not enforced they grow in number. People arriving from all over the country swelling the number.

          Neither has the mix of people on the streets changed much over the decades. Less than 20% have any connection with the City. Recent arrivals in the last year or so. Around 10% are mentally ill who wont take their meds and cannot be forced to under California law. Unlike other states. Around 10% are the usual transients and drifters. Always harmless and rarely a problem.

          The rest are alcoholics and junkies who refuse treatments programmes. Prop 57 put very large number of criminal junkies back on the streets. And in the last few years up to 10% are street criminals released on the streets due to Prop 47/57 making petty crime law unenforceable. And in the last year or two the City DA has returned the City to the MadMax years of the 1990’s before Three Strikes.

          Until 10 or 15 years around 5% of people on the streets were street kids, runaways, but they have pretty all gone to the East Bay now. You see lots of them in Oakland.

          Of the around 10K odd street people in SF, a number which has not changed that much over the decades, maybe 1%/2% max at any given time are actually homeless. Local people, people with roots in the City, who lost their apartment / room for various reasons and have nowhere to live at the moment. They are usually soon off the streets as there are so many programmes to help them.

          What has also not changed over the decades in SF is that there is a whole industry employing several thousand people spending hundreds of millions of dollars a year to “solve the homeless problem”. In the last four decades, and many billions spent, there are just as many people on the streets as there were back in the 1980’s. Because the problems has absolutely nothing to do with housing or affordability. It’s drug abuse, petty criminals, and the totally dysfunctional mental health laws in California since the 1980’s.

          SF was just as “unaffordable” in the 1980s’ as it is now. When compared to the minimum wage. The two big spikes in rents, the late 1990’s, and the mid 2010’s, were caused by the usual bubbles. But the reversion to mean is well under way. A 4% p.a rise, decade after decade. And its been like that since very large decline in City population which started in the 1950’s ended in the early 1980’s. When the population bottom out at maybe 660k.

          There is no “homeless crisis”. This is however a massive crisis in city governance. Due to massive gentrification of cities by the kids of affluent suburbanites who vote into city government politicians more interested in virtue signalling politics than the actual day to day government of a big city. The end result is the city becomes horrible to live in due virtue signal politics and all the gentrifiers move on to some other nice city to destroy. Or back to the suburbs they came from.

          For some reason a plague of human locusts comes to minds.

        • Whatsthepoint says:

          Chicken and egg….perhaps the constant stressors of living on the street contribute directly to mental illness, alcohol and drug abuse. It is lack of affordable housing that drives low income (and maybe middle income now) to reside in their cars (if they’re lucky) or overpriced motels …I’m thinking of the Motel 6 in Thousand Oaks even 10 years ago. There is a core percentage who are clinically mentally ill but the majority have simply fallen down and out…

        • w says:

          Many homeless are vets.Many are minorities.Most are men.Many homeless create a drug addiction After trauma and homelessness.Data cited by homeless advocate groups underline the fact that it is best practices to house the homeless in individual,small apts. Or motel rooms while offering scaffolding services with social workers,dr.s,nurses,addiction specialists,trauma experts,etc Many areas in this country do not come Close to the capacity needed to actually help homeless populations.Eviction is a Huge destabilizing agent and Not uncommon in homeless people’s backgrounds and this is where income disparity comes in because these rents are and have been too high for many people,they fall behind,eviction notice on the door,3x as many landlords have lawyers than the tenants.Free/vheap legalaid was swamped before covd,worse now.

        • Ted says:

          I live in Lake County Illinois, 7 miles from the Wisconsin border. When I drive into local communities there are people standing on the corners holding up signs begging for money. I talked about it with the State’s Attorney at a meeting and he said that these people stand there until they have enough money to buy drugs and go get high together in a room they pay for by the day. They don’t want or can’t cope with help which is readily available.

        • Ron says:

          Where do they get money dope ain’t free

        • Beardawg says:


          Having grown up in the Midwest – it is cold in the winter for sho !! ;-)

          I agree with your take here. My overly compassionate daughter interacted with homeless regularly in No Cal for about 8 years until a couple months ago. She confirms the “refusal to accept” resources which are available, coupled with ignorance. Those who wanted a place to stay, free food, clothing etc WOULD follow up on the resources she informed them about. They were (are) the minority, according to her.

          Recent economic factors HAVE created more homeless. There is a lag time for when those who WANT assistance choose to learn HOW to get it. Until that learning curve flattens, combined with additional construction/ conversion of homeless housing etc, we will see higher numbers of homeless.

          It would be great if the homeless could be more productive and participative, and I think many will, after our collective Govts succeed at setting the bar lower, which seems to be more effective in garnering votes.

        • Mora Aurora says:

          My late wife was a long time health care provider (nutritionist) in the interior of BC. She explained to me the little known of practice of ‘releasing’ disadvantaged and mentally ill patients from the larger cities of the coast, mainly Vancouver, to the smaller towns of the interior, where it was deemed cheaper, safer (and less costly) for ‘them’.

          She said this had been going on for many years and was due to hospital and services cutbacks. These new and disadvantaged faces in small towns are noticeable and in the past would seem to melt away or gravitate back to familiar territory.

          Of recent, I also note, the numbers of disadvantaged have increased in my neck of the woods but it is no longer cheap to live in the interior and crime has markedly increased. It seems many (locals as well) are struggling, dropping down the ladder and adding to the numbers. This appears to be a shadow corollary to the phenomena Wolf discusses in this article. Where will these people go now? It is impossibly cold and snowy in the long interior winters and compassionate resources are not increasing at the exponential rates of rents, housing and food.

          Another sign that MMT and financial engineering is instead, torpedoing the life boats.

        • Jack says:

          “some homeless people will not participate in the “care” that is offered by the cities.”

          San Francisco is in the forefront of solving the no drugs/alcohol in shelters conundrum;
          Deliver drugs and alcohol to the unhoused from all over America who win the lottery and get housed in the Mark Hopkins or other nice hotels. The more you spend on them, the more that come;
          “By the latest count in 2019, the official figure swelled to more than 8,000—and by the city’s more broad standard there were more than 9,700 people without homes in SF. But wait, it gets worse: The San Francisco Department of Health’s database even suggests that the problem is much higher, with an estimated 17,600 homeless residents citywide.
          This despite hundreds of millions of dollars poured into homeless relief services every year. It would be easy to declare City Hall’s anti-homeless campaigns a complete disaster and start debating whose heads should roll.”

      • Anthony A. says:

        Two homeless, middle age, ladies show up in the Burger King my buddies and I frequent every morning. We buy them breakfast, and one cold day this winter here, we (10 of us guys) chipped in and gave them each $100 so they can go to a hotel and get a room and shower and stay out of the cold. This is in The Woodlands, TX, an affluent community.

        • Cold in the Midwest says:

          Good for you Anthony. Better to do that than wait for the government to do anything about it. Homelessness is even sadder for the middle aged and elderly.

          Ron – I think the alcohol/drug costs are often financed by petty theft, at least in CA. Shoplifting and car break-ins are two obvious examples. The passage of California’s controversial Proposition 47 downgraded property theft from felony to misdemeanor when the stolen items are worth less than $950.

          Good points Beardawg. But I question what proportion of the currently homeless actually want assistance. The ones that are seriously addicted to drugs and/or alcohol will often want just to be left alone, provided the environment they are living in offers the opportunity to continue their addiction.

          And I also question how many would go into a homeless shelter (even if more shelters were available) if doing so requires them to stop using their substance of choice.

          I heard on one video that roughly 35% of the homeless in California are not from that state. They found a way to get there after hearing about the permissive environment and, of course, the CA climate. Lot easier being homeless in CA than in other states. Like the cold Midwest. Ha.

          Very interesting discussion folks. To lighten it up a bit, please go to YouTube and search on “raccoon homeless mcdonalds.” Sad but also very funny, and the incident happened in (where else?) San Francisco.

        • Swamp Creature says:

          Why don’t they just set up soup lines and feed these people like they did during the depression. It wouldn’t cost much and I’m sure a lot of caring people would volunteer to man the soup lines. Better than have people starving in the streets. This is getting painful to watch.

      • Old school says:

        Government can’t be responsible for everything. Do these people have families? If not then maybe government should be responsible, but sorting it all out gets complicated.

        Government provides everyone with at least 12 years of free public education. If it’s free people are not grateful but can feel entitled to even more.

      • George says:

        Arriving homeless on the street is a dignity stripper. Those living in their car or refuse shelter cling on to any sense of still being in the game. Curiously, even drug use is viewed as remaining independent. The insurmountable depression that occurs disables you and your hope.

        People understood homeless a lot better during the last depression. The CCC, WPA, Government camps etc. were relief efforts substituting for employment at the time. They addressed a desperate nation by putting people back to work and restored the confidence one needed to lift themselves up. Although these efforts are often criticized as make work projects, they induced hope, a most viable human condition somewhat lacking today.

    • Scramjett says:

      Don’t lump us Californians all together. As Wolf pointed out in this piece, those of us in the lower income counties of Cal are getting just as screwed as you folks in Boise. The rich tech bros and other wealthy elites are the ones who’ve jacked up rents and housing costs to the stratosphere here and there.

    • SpanishEyes says:

      Amen to that, Brother! Boise was still a really nice place as recently as the early 2000’s, but what was so special about it has largely been lost. The leadership (both D and R) are rabid about destroying what’s left under the ridiculous notion of “smart growth” and the theory that growth improves the economy! If that were true, Singapore would be the cheapest place on earth. Really, growth just moves money from average people to the developers and political and business elites. Home prices and rents are insane, the character of the city has largely been destroyed, and our once magnificent outdoor spaces are rapidly deteriorating from climate change and continual overuse. Homeless and criminal pop’s are exploding, and we’re well on our way to becoming the new SoCal. It’s sickening, and so grossly unfair to the locals. So sad!!

    • w says:

      Has Anyone talked to these people to get their stories?Be interested in noting geographical differences and nationwide patterns.

      • Petunia says:

        Homelessness among men is high because it’s official policy in the welfare state that they are ineligible for any benefits. The welfare system, since the War on Poverty, is geared towards women with children only. If there’s a husband/father in the home, the man must leave for “the family” to receive assistance. This policy is what has led to the rise of fatherless homes, illegitimate children, and high rates of homelessness among men.

        • gorbachev says:

          When I was a child this was true for
          many of my impoverished neighbors
          but I thought we had moved on since then.

        • Lisa_Hooker says:

          I will bite my tongue, but based upon 25+ years of experience, the more illegitimate children and the darker the color, the easier the welfare. This is not proven, just my experience. I don’t believe this is because of racism, I think it’s political correctness. The politician with the most votes wins.

    • DawnsEarlyLight says:

      People from all the high cost of living cities, with their high cost of living salaries, are moving to, and ‘money muscling’ out residents of lower cost cities. Maybe these ‘high cost’ salaries should be adjusted to the local HH income?

    • Lynn says:

      Well, they are Californians, but they are also people who moved from all over the US to tech jobs etc in California. They have been doing the same thing to Californians for decades. Basically what you really have moving in are people originally from all over the US. A large percentage of whom are spoiled and a bit unconscious of their effects on other people. We are glad to be rid of them..

      I would bet that if the truth were known you have a ton of “investors” as well, some of whom are just looking for a place to put foreign money. It would be interesting to know how many of those single family homes and condos are empty most of the year.

  3. Depth Charge says:

    What does it say about a society where you can work a 40 hour week and still not be able to afford a roof over your head? Where a central bank and crooked government work hand in hand to try to force house prices out of reach of people? Because this is intentional. Both the central bank AND the government have gone on the record to say they were intentionally going to blow another housing bubble. This is sick, sick stuff.

    • Scramjett says:

      Asset inflation to prop up the wealthy. Funny considering those same rich people will go crying to the pols for a bailout when it blows.

    • Nacho Libre says:

      Guys guarded behind barbed fence and military weapons (looking at you capitol hill dwellers) say you can’t have means of self defense. And the sheeple clap and rejoice.

      That’s our society right now.

      Central planners (err, bankers) have made a mockery of economic prudence. If you have spent within means and have saved up, you’re a schmuck. If you have leveraged up your eyeballs and bought 3 houses, you’re a financial genius.

      Fed has robbed a generation off interest on their life savings. Fed has robbed the younger generation off their ability to buy a house.


      • Anthony A. says:

        “If you have spent within means and have saved up, you’re a schmuck. ”

        Yes that’s me and my other retired friends. You know, the guys and gals that fought in wars, worked hard, saved, paid our taxes, got our children out on their own understanding and practicing good ethics and judgement.

        Yep, we are all schmuks.

    • YuShan says:

      Yes it’s disgusting. It’s by design. It is official policy. And mass media and celebrity economists like Paul Krugman are cheering it.

    • Old school says:

      I believe we are at a stage that you have to think out of the box on housing because of where we are at. Hardly any thought is too crazy. Buying or renting traditional housing in most markets doesn’t make sense for modest income young people. Don’t give into FOMO.

      • Lisa_Hooker says:

        Think in the box. A refrigerator or freezer box under the overpass out of the rain.

    • Lynn says:

      Absolutely sickening DC. It’s blood money. It’s a cannibalistic economy.

  4. hikusar says:

    most rent increases in CA can only go up 5%+CPI or 10% per year, whichever is less per AB 1482. So many in CA will not have large rent increases, but they’ll be stuck into their current rental unit as moving locally would mean paying more.

    • Anthony A. says:

      Yes, I’ll bet that 1482 been enacted to match the renter’s annual raise from his/her job.

    • Petunia says:

      Our last rent increase in Florida was ~6%, unfortunately our income had dropped during that year, and we could no longer afford the increased rent. Landlords assume tenant incomes only go up, but mostly it stays the same or goes down. This is what is causing so much homelessness.

    • Old school says:

      Isn’t economics 101 that price controls cause shortages?

      • Fat Chewer. says:

        No. There is no such thing as rent control in Australia, but we also have many homeless people. I used to be one of them. I had two heroin junkie brothers whose only option was to crash with me, their baby brother. I didn’t want them. If I kicked them out they would sleep on my doorstep. I once went to the police to get them out, but I was told that police don’t interfere with such matters. I was 21 at that point. In the next few years, their gangster mates and dealers made my life a living hell. I eventually could not support my own existence having everything including my money and food stolen off me in my own home. I ended up homeless because I found it was easier than paying for the existence of a bunch of shitty junkies. My brothers both died not so long later of ODs. So work that all you people who think you know what you’re talking about.

        • Anthony A. says:

          Thanks for posting your story. It’s telling, and situations with the homeless are not going to get any better, especially in the U.S.

  5. cas127 says:

    One potentially positive point:

    Most of the destination cities that are seeing rent increases,

    1) Are not nearly as heavily populated and landlocked as the departure cities,

    2) The destination cities are mostly much more pro-development than the departure cities.

    This means that additional housing supply is likely to accompany increased jobs/population in the destination cities…lowering rents over time.

    But it takes just under a year to build your average modern apartment complex, and 2020 was chaotic, so rent adjustments will take time.

    • Scramjett says:

      I hate to burst your bubble, but most of the new housing stock being built in these “destination cities” are listing at even higher asking prices and rental rates than the existing housing stock. Developers are capitalizing on the exodus by listing at prices they know are higher than the locals can afford but low enough to entice the high income new comers.

      • cas127 says:

        “listing at even higher asking prices”

        New apts are always the priciest…but the increased supply puts downward pricing pressure on the pre-existing apt stock.

        Both supply and demand yield price.

    • R Hughes says:

      No. Just look at the huge escalation in every area of building materials, plus shortages. Affordable is almost non existant now.

    • Beardawg says:


      I had not read your comment before responding to Cold in the Midwest (above). Your take is much in line with my daughter’s “on the street” experiences in No Cal. I agree that time will smooth things out and in addition to more affordable housing being built in destination cities, there will also be more homeless housing. Marin County (Greenbrae) fought hard on the NIMBY theory, but lost the fight. Low income / homeless housing will be the new market in an age where govt subsidy of some sort is reality for most people. It will take some time to make the full transition.

  6. SaltyGolden says:

    Plenty of folks living in high income rental markets (now) couldn’t afford rent to begin with (when rents took off at x point). Though I suppose I still empathize with the folks in Fresno.

    I really empathize with anybody that used to rent in less expensive parts of the Bay Area, then moved to Stockton/Fresno/wherever to escape those rental prices and are now being squeezed by this.

  7. Sir Eduard R. Dingleberry III says:

    “Places Californians flee to” becoming expensive was the final stage of the bubble last time. History rarely repeats itself but usually rhymes.

    • Turtle says:

      Yes, it was Phoenix and Las Vegas last time. Now it seems to be everywhere.

      • Sir Eduard R. Dingleberry III says:

        Reno and Tucson went crazy last time too. I think it’s similar to what’s happening now. The Phoenix chart from the first bubble is crazy. Prices doubled in about a year from the looks of it.

        • DawnsEarlyLight says:

          My HOA of $350 monthly, in downtown Tucson, covers watering 2 cactus and sweeping the gravel off the sidewalk once a week. That price is only because it was locked in for a long period of time.

        • DawnsEarlyLight says:


  8. Micheal Engel says:

    1) The US economy is Strong. The CPI is strong. US GDP will be very strong in 2021 and 2022. WTI trend rising from minus 40 to 60 is strong.
    2) That was Benjamin Strong Jr 1928 last song.
    3) Last week, on Apr 1st, a snowy day, in front of three days weekend,
    market makers were fully invested, because they believed that the
    market is strong.
    4) SPX daily. This Fri, market makers were fully invested, because they believe that we believe that the market is strong.
    5) On Mar 26, a HQ bar, a full size big green, the market jumped. Market makers got a DM flip, day #1.
    5) Last Thurs, on Apr 8, day #9, the bar was tiny, 1/3 of of yesterday size, on higher volume. Strange.
    6) SPX might move higher on Mon and Tues, but the risk is growing towards Apr 15 and Fri Apr 16, unless the spy ship issues
    blowup earlier.
    7) The $15 min wage was a feint for supporters to blowup. The higher corp taxes is a feint for wall street. Yesterday SPX might be a feint, before the market faint.

  9. DanR says:

    I am not very troubled by this article and its findings. I’ve rented in America’s two biggest cities off and on since late 90s as well as suburbs and smaller cities two hours away. It is clear to me that the big city places were much more cramped and had fewer amenities than those in smaller cities. I felt that rents rationally reflected this from late 90s to early 2010s, while also accounting for location premium.

    States may need to think about providing some more social services and basics to the people living outside the big cities!

  10. otishertz says:

    Methinks work from underwear is a better description than work from anywhere.

    • Depth Charge says:

      I wouldn’t even call it work. I’d call it grift. A lot of these people aren’t producing anything of value anymore and could be completely eliminated.

      • Anthony A. says:

        Yes, when coming high inflation forces employers to give big raises, the eyeball will focus hard on the WFH crowd.

  11. Todd Miller says:

    Very perceptive. Glad you picked up on this story. My son graduated from college in May 2020 and was one of the fortunate ones, finding a job in about 4 months in a large midwest city (Columbus, OH) but at lower salary than he’d expected, due to competition from displaced workers. He’s been working from home and now his company is moving back to the office, which means he will get an apartment in Columbus … but housing is tight there and rates are steep.

  12. Gl says:

    Well shit! We were hoping this would never happen. We did not want people in the large metros discovering what they were missing in the country.

  13. MiTurn says:

    There are scores if not hundreds of small communities in the Midwest –think Minnesota, the Dakotas, Nebraska, etc. — that have been suffering from depopulation for generations (“rural flight”). These communities are begging for residences. If someone can work from anywhere, these are a thought.

    Granted, there’s a reason folks don’t remain in these towns, but it’s mostly because of the lack of advanced job opportunities. But many are quaint, clean, and very livable.

    • RightNYer says:

      And the reason that there aren’t many job opportunities is that the jobs that were suited to more rural living, like manufacturing, were intentionally destroyed by our “elites” so that most of the jobs were in august “services” like “software engineering” for Facebook, trading “financial products,” and other parasitic endeavors.

      • MiTurn says:

        Which makes them all the more affordable to folks who can work from anywhere and are not dependent upon the local economy for income. Indeed, WFH folks would add to the local economy.

        • RightNYer says:

          Right, but the infusion of outside money drives the prices up for people who have low wage jobs there.

          It’s not all good things.

      • Uncle Salty says:

        “trading “financial products,” and other parasitic endeavors.”

        LOL! And this coming from someone who posted in a previous article about making 80 bucks in an hour trading the levered ETF TQQQ!

      • Uncle Salty says:

        RightNYer, Awaiting your reply.

        Here is your recent post:

        “Almost all in the last hour though. It’s becoming a predictable joke. I actually made $80 on TQQQ that I held for 45 minutes. I’ll buy some dinner.”

        From this article:

        And here is part of your post from this article:

        “trading “financial products,” and other parasitic endeavors.”

        Did you use your stimulus check to fund your account?

        • RightNYer says:

          I mentioned that trade ironically/sarcastically. Obviously if it was only an $80 profit I wasn’t trading much.

          I didn’t get a stimulus as my income is too high.

        • Uncle Salty says:

          Very good, thank you for your reply. May I make a suggestion that you tone down your rhetoric just a bit? After all, the name of this website is:

          “Wolf Street
          The Stories behind Business, FINANCE and Money”

          Good day sir.

        • RightNYer says:

          I don’t think my rhetoric is incompatible with a blog about finance. There’s a difference between the way it should be, where finance is a means of providing orderly capital to businesses, what it actually is these days, with finance being the end game in and of itself.

    • Dan Romig says:

      St. Cloud, MN is playing U Mass tonight for the NCAA hockey championship.

      From the Minneapolis Star Tribune a year ago:
      ‘St. Cloud collage (Technical and Community College) gets $2.5M grant to build manufacturing training lab’ -May 19, 2020. The grant is from the US Commerce Department for the college’s Energy & Electronics program.

      “The grant comes at a time when many Minnesota manufactures complain they cannot find enough skilled-job candidates to replace the thousands of baby boomers at or past retirement age.”

      “Factory-consulting firm Enterprise Minnesota consistently found during surveys that lack of trained workers had hindered factory growth across the state the state for several years.”

      “The new Advanced Manufacturing Training Lab will provide an enhanced pipeline of talent to fit the needs of manufacturing firms in the St. Cloud area.”

      This is just up the road from the Arctic Cat manufacturing plant. Need an ATV or snowmobile? We build them in Minnesota.

      • josap says:

        Companies used to train new hires. Now companies want a person pretrained. Pretraining means college or tech school. School means loans.

        Set the debt trap and snap it shut.

        • Fat Chewer. says:

          Yep, that’s how they work it. I gave up chasing those bits of paper and student debt. I knew the people who were chasing them and their belief was that employers are only looking for those bits of paper. They LOVED open book tests where you actually had the textbook open to find the answers while you were doing the test!

          “Is it an open book test?!” they would enthusiastically ask the teacher. “Why, yes!”, the teacher would say and they all looked at each other happily in the knowledge that they were already on the gravy train. I was trying to work out what the point of open book tests actually was. Silly me.

          They were right, those employers were only looking for bits of paper and now we have a situation where people with a ream of paper are totally incompetent, but VERY well paid.

          I wonder how long it will take for these employers to realise that bits of paper alone do not make a good worker. As long as it takes for them to realise that they can outsource that job to India for pennies after folding the current operation and starting a new sleeker profit machine?

      • cb says:

        Apprenticeships. No need to get govt training programs involved. Let the companies involved pay and train the workers. Earn while you learn, Better for all involved, including the taxpayer.

    • In a hundred years the prairie will probably have reverted to the original state. Most of these towns die when services die; the doctor leaves, the supermarket, or Walmart closes, the bus doesn’t stop there anymore. No commuter flights. There is no sustenance farming, the seasons don’t allow it. Friend in NE, their growing season is between the last frost and the first hail storm. Once the NA had horses they became migratory, otherwise they were living in a prehistoric culture. The area is really unsuitable to house large numbers of people, being far from the coast. We should give it back to the buffalo and harvest all that grass fed beef.

  14. David Hall says:

    Mortgage and rent forbearance is scheduled to end June 30.

    I got tired of the rent going up. I bought a home. Now I have HOA fees going up. Some people on the board of directors want more improvements. Each year they repaved a street or two. They committed to building a new wood workshop. The pickleball players want more pickleball courts. There are no more homes for sale not under contract in this community. Homes for sale were scarce in 2006 too.

    People in the community Facebook group reported their homeowner insurance went up hundreds of dollars this year. This is due to an active hurricane season last year.

    The household income is pretax income. There are flat taxes too. Some areas have 7% sales taxes; state + local. Hotel rooms are taxed.

    • RightNYer says:

      I don’t think for a second the forbearances will end on June 30. Our idiot leaders have painted themselves into a corner. Ending these will cause a crash, so they’ll have to extend forever.

      • MiTurn says:

        De facto UBI?

      • Depth Charge says:

        That’s the thing – eviction moratoriums and mortgage forbearances were instituted on the grounds of stopping the spread of the virus. The idea was that people getting evicted would double and triple up with other households, providing the perfect environment for the virus to spread to large numbers of people. Yet, every single time we hear about the extending them it’s to prevent millions of people from becoming homeless. These people are FOS.

      • Lynn says:

        If they don’t do something that causes a price crash then they’ll have to build a good deal of public housing if they ever want to take the razor wire down from around the white house.

        Might be a good time to invest in razor wire. The state houses are going to need them too.

        &.. We can tell people are starting to get out more. The mass shooters are back..

        • Lynn says:

          Better if they prevented foreign money at least from owning second or investment homes, but they’re all invested in real estate so they could care less.

        • cb says:

          @ Lyn –

          Better yet if they prevented foreigners from buying any real property.

        • Lynn says:

          CB, YES!!

          & Many of those countries do not allow foreigners to buy there. Such as many parts of Mexico and China.

    • Swamp Creature says:


      I think insurance companies actually LIKE hurricanes. They help their bottom line. It gives them a chance to NOT pay claims by calling the damage flood damage (not covered) vs wind damage (covered) and then to raise premiums on all homeowners who live in a particular hard hit area even if they didn;t file a claim. They make a killing on the tragedy. After Hurricane Andrew in 1992 I had the fortune to visit the area, ground zero, where the hurricane hit near Homestead AFB in SE Fla. One year after the hurricane, homeowners were nearly priced out of their homes because of the increase in their premiums. They were outrageous.

      Insurance companies are not your friend. The only reason to have them are because you have to have them, and may need them to settle legal litigation.

    • Clete says:

      HOA’s are the Comcast of suburban living. You’re forced to pay and pay and pay, more and more every year, and you get nothing in return.

  15. timbers says:

    People are changing the way the live and/or I’m seeing it more than I used to.

    A huge house sold last year around the corner from mine. It’s basically 2 houses put together, forming a T shape. Half of it is a split level ranch, and then creating a T formation a 3 level house is attached to it at one end. An incredible amount of space. It’s an ugly structure. I’m sure there is a story how it got thru zoning but that’s a part of history I know nothing about.

    Every morning I walk my dog past this monster house. Up to eleven cars are parked in the driveway and overflow into our wide suburban streets. These folks are probably a Haitian or African or Creole extended family or tight group of friends who planned this out and bought a large house they could all live in and collectively afford. They held a wedding event at the house and in it’s yard shortly after they moved in.

    I live near but outside the Boston Metro area. Probably in an area experiencing higher demand to live in. Maybe holding it back is it’s racial diversity, but not much because the internets say our home values are rising faster than locations not known our kind of “diversity.” I guess it’s time for me to raise my rent when the current tenant moves out, party because I can. But it won’t cover the amount my property taxes (and City water bills) have gone up in the 5 yrs I’ve been here, that’s for sure, as property taxes alone have gone from $3,200 to $5,000/yr in those 5 years.

    There was an article in the local paper that city councilors where getting angry calls from residents that their taxes keep going up and up every year. The councilor expressed frustration that she couldn’t get the Stupid Peasants to understand that their taxes really went down, because the tax rate was reduced on their higher assessed valuations.

    • Mike T says:

      I was just checking online our old house located in a nice town in western MA that we lived in before downsizing after the kids flew the coup. The property taxes have doubled in 6 years and are now at $11k/yr. Remember you have to have after tax income to pay the poverty tax so if you’re working that’s $15k of pre-tax wages. Crazy!

      • Lisa says:

        When people are buying a house and the lender approves them for x amount they never include the property tax. I wonder how many ppl overlook this fact when they are frantically bidding on a house. The prop tax is so wonky in Cook Cty, some 500k houses have property tax of 11k and some are 8k when the lot size is the same. It all seems so manipulated.

        • Shiloh1 says:

          Those in Crook County have access to the tax appeal law offices of Madigan, Daley and Alderman Burke. Too bad Al Capone didn’t think of this racket.

        • Old school says:

          That’s right. I have had a good deal on rent for 15 years. I might have to leave one day so I have ran the numbers and since I am retired I plan on paying a certain price cash and then mentally setting aside the same amount for all future taxes, insurance and maintenance in my retirement account so in affect a $250,000 house ties up $500,000 of funds allocated for housing.

        • Erle says:

          @ Lisa, In 2012 or perhaps 2011 I bought two houses, for 45k and 18,750 from FHA on defaults. Cash deals. The first one tax was 2800+ on the 45K and the other was 2900 on 18,750 .
          The defaulted loans were for 115k and 139k respectively. The city took two years to reflect my cash price on the purchase and refused to adjust even a little for the gross decline in prices on a government sale. Look at those percentages of tax on the sale prices.
          I fixed them up and they were modest but still quite pleasant.
          I couldn’t believe that the one that was sold for 18,750 could have gotten that 139k loan just two years prior. The mortgagee only made a few payments and defaulted. Only government would have made that type of loan on a total dump without regard for the taxcows that lost 86% on the loan that quickly.
          Get the goomint out of the housing rackets and education loans and gifts to GE and Amazon and all of the parasitic entities, then perhaps we can sort out what all these bubbles and collapses are really worth.
          When I awake in the morning I do my chant on just how much I hate the system. It keeps me regular.

        • taxpayer says:

          Due to configuration of local government boundaries, Cook County has thousands of different tax rates depending of tax base and spending habits of local gov’ts. Some tax rates are double others, and accordingly taxes can be twice as high for properties of equal market value. But high rates among other factors depress values, so a $200,000 house in one area might be nicer than a $400,000 house in another.

      • Another Scott says:

        Given that in Massachusetts, the overall tax rate can’t increase more than 2.5% a year, it’s likely because the town your former house was in had single-family homes increase in value more than multifamily units and commercial properties, so the taxes on those categories likely went down. From my reading, the poorer areas in the western part of the state have higher property tax rates on residences because of a general lack of commercial properties, which are taxed at a much higher rate than elsewhere.

        • timbers says:

          And, the decline of retail commercial real estate probably shifts taxes onto homes. I’ve been reading articles predicting doom for places like NY seeking to tax the rich, that working folk will hurt if the wealthy leave. I’m not so sure. London IMO was much more interesting, affordable, diverse, and accessable to everyone – working folk and rich included – before it enacted policy to atract wealthy elites. Working folk might discover driving the rich out of their neighborhoods even entire nations is the best thing they have ever done.

    • RightNYer says:

      “There was an article in the local paper that city councilors where getting angry calls from residents that their taxes keep going up and up every year. The councilor expressed frustration that she couldn’t get the Stupid Peasants to understand that their taxes really went down, because the tax rate was reduced on their higher assessed valuations.”

      This nonsense from these people drives me insane. It costs the same to provide police/fire/sanitation sewer to a 2,500 square foot home whether it’s worth $500k or $1 million. That these people think an increased value based on a Fed bubble is license to drastically raise taxes is a sick joke.

      • Swamp Creature says:

        This is the same BS that we get from our County elected leaders every year. They should have reduced out local taxes by 1/2 because the schools which account for 1/2 or more of the spending were closed for over 1 1/2 years. We have been paying over 3.5K for a closed public school system.

        • Swamp Creature says:

          Private schools have been open with in class instruction for the past year, with no problem. They don’t seem to have any problem adjusting to the pandemic. If I had kids now I would be pulling them out of the public school system. The teachers’ unions don’t care about our children. All they care about is pocketing their paycheck and benefits. Its a disgrace.

      • Wolf Richter says:

        Politicians at the state and local levels love housing bubbles because they bring in lots of revenues.

        • Depth Charge says:

          Yes, and they build gorgeous new buildings for the government workers, with brand new computer equipment, furniture, etc. And they get bonuses, hire more and more workers, etc. It’s gone completely off the rails, where government continues to expand and spend to justify its existence. They will never run a surplus because then they can not get even more money. They spend it as fast as they can. We need to shrink all government by 1/2 to 2/3. It’s gotten too big, and that’s why we find ourselves where we are.

        • Yort says:

          Wolf – oh boy, oh boy, oh boy… you typed the word “Property Tax”…so here we go…HA

          Stonk Market “Capital gains” taxes versus House “Capital gains” Property Taxes:

          Stonks taxed only when sold, not yearly like houses
          Stonks only taxed on cost basis (Sell-Purchase value), not full asset value like houses (“sellable” value).
          Stonks capital appreciate and pay dividends/rent, acting just like a house capital asset
          Stonks allow one to control when, if ever in a lifetime, one pays capital gains taxes, houses are forced to pay on annual basis
          Stonks are not necessary to survive, houses are necessary unless you enjoy living under a bridge…down by the river…
          Stonks have very small 0.20% maintenance fees, houses have 1-3% maintenance fees.
          Stonks do not require asset insurance, houses require expensive asset insurance.
          Stonks are liquid assets, houses are illiquid assets
          Stonks are absolutely free to buy and sell, houses cost 5-6% to buy or sell
          Stonks are durable goods that do not depreciate, houses are consumables that are at risk of depreciation.

          I could do this all day…you see the point?

          Property taxes are kind of cruel compared to captital gains taxes. And what exactly “mooore” does a society get when house values double in 10 year, like in the state of Texas, versus 10 years ago. Do Texas residents get twice the govt services, twice the quality of schools, twice the quality of local life when their property taxes double? Property taxes are almost as much a fraud as the stealth tax called inflation. Property taxes create a world in which nobody is free of govt tax shackles. You must labor to obtain money to pay property tax or you lose your shelter. What this does is force the bottom 90% of society to become wage/stimmy slaves to propety taxes, healthcare, debt, inflation, etc.
          And now the next “free folly” is for paying everyone’s child care 100%. At first blush, that may seem noble with a hint of empathy. At second blush, govt and corporations need more people to work from cradle to grave, thus how can we get those moms and dads back to work if they have to raise their kids and stay home. Much wiser to pay someone else to raise someone else’s said kids, and have the parents both work two jobs instead…so they can pay their property taxes? So does the first person taking care of the second person have kids, and do we hire a third person to take care of the first person’s kid, so the first persond can take care of the second person’s kids…. Whaaa??? Two birds with one stone I guess. More like a few millions birds per stone. So is the trillions for free childcare really about “doing the right thing”…or is it about creating another vote buying mechanism that enslaves a populace into working for corporate America from cradle to grave, so we can pay dozens of survival and hidden taxes and pay for someone else to raise our kids. Just food for thought…

          Getting back to the point, we can print money to make sure the Stonk market never falls for longer than three weeks? Can someone explain why even need to pay property taxes on our necessary shelters when the govt can just print trillions if fiat money and send it to states? How many people end up on the streets homeless because they can not afford their property taxes, at an average of $3,717 of re-occurring misc-tax expenses on almost every home in America. Free college and $1.7 trillion of student loan forgiveness for biology and theatre arts degrees….yet no propety tax reduction, forgiveness, or even help paying housings largest expense??? $1.7 Trillion student loan forgiveness possible, yet can not reduce the $323 billion annual home owner property taxes one shiny penny…and instead the local govts in 2020 increased it by the largest amount per year on record since 2005 (Note housing values increased almost $2.5 Trillion in 2020).

          Per the Internet:

          American home owners received bills for $323 billion in property taxes last year, a 5.4 percent increase from $306.4 billion in 2019. … This average was up 4.4 percent from $3,561 in 2019…

        • Swamp Creature says:

          You could get rid of 50% of the Federal Workers and 75% of the contractors that work for the Feds and the public would notice a thing. In fact, the private economy would get a boost form this action.

        • MCH says:

          And those bubbles are extending everywhere. Been talking to realtors in Dallas about finding a place. The prices are comparable to what the Valley was like in the early 2000s, and worse yet, the dreaded word that comes up with these realtors every time. “MULTIPLE OFFERS”

          The things we saw in the news recently for Sacramento, Berkeley, etc, these all apply. Sight unseen, houses are been bought up faster than one can blink.

          Thanks Powell, and our imbecile politicians who decided that a combination of eviction moratorium and mortgage forbearance was the right way to get out of an economic disaster that you guys created. But none of them care, just blame it on the last guy or pass the buck off to the next guy.

      • SocalJim says:

        Every state should pass prop 13.

        • It definitely keeps neighborhoods together, and more diverse. I would have thought you would be against 13?

        • Depth Charge says:

          False. Prop 13 is unconstitutional and punishes the young. It’s ageism. There is absolutely no reason in the world that two people with identical houses should pay completely different taxes to the county.

        • Rcohn says:

          Prop 13 creates huge tax differences between a house that you have owned for decades and and a newly built house ..Prop 13 allows you to pass on your tax basis to your heirs ; thus perpetuating this difference into the future.
          A really stupid law

        • Apple says:

          Prop 13 allows businesses to escape paying property taxes.

          Do they really need to pay less taxes?

          Google leases land which has been owned by a family trust since the 1970’s and is taxed at less than $800/acre.

        • MCH says:

          If TX passed prop 13, it would die within a year.

          Having said that, prop 13 can only be against the young for so long, because eventually the older generation who has been handed these gains will move on or move out of state. Yes, the tax basis might be passed on, but not all of those people would benefit. Consider the number of houses that has been sold in CA over time, I would be curious to see how many people retained their of the tax basis extend back to 2000, basically about 22 years after prop 13 has been passed. I would guess the percentage of that going back to 1978 would see a gradual decrease.

          And all things considered, it’s the one saving grace for Californians because all of our other taxes have gone up over time. People like to complain that if it wasn’t for prop 13, the state wouldn’t be in such terrible shape… it’s laughable because that implies the current supermajority wouldn’t be spending like drunk sailors for the last ten years and raising taxes every chance they get because they didn’t have to worry about the hole prop 13 created.

    • Lynn says:

      A lot of those houses are owned or rented by one party and rooms are rented out by that party. They’re run as a business.

  16. Swamp Creature says:

    This figure in the table above

    15 District of Columbia DC 2,107 -11% 92,266

    is about right, based on a limited sample. My kid owns a two bedroom Condo in near Dupont Circle, nice area. She is renting elsewhere but was complaining about the about the decline in the rents over the previous year. I told her to stop whining and complaining and be glad she has a good job and a roof over her head. She makes more income than we do. This is the new millenial generation.

  17. Shiloh1 says:

    Would be good to know the local property tax component for rental properties in these venues. And year over year change. After all, we’re all in this together – and no government officials around these parts have missed a $1 of pay.

  18. Xavier Caveat says:

    Once a San Franciscan has been to Fresno, really what chance does the former city have in holding them hostage financially?

    The 5th biggest city in the state has a similar situation with oodles of homeless, so there’s familiarity going for you, along with a couple Trader Joes & a recently demoted minor league baseball team going from AAA ball to single A, almost like the Giants fall from grace.

  19. breamrod says:

    “real estate is local ” as they say. Rents in Atlanta and suburbs north are very high compared to the rest of Ga. Would be a very interesting study to really get” into the weeds” so to speak of every state country vs. city. Wolf’s empire would have to hire 50 analysts to get that job done!

  20. Micheal Engel says:

    1) QQQ closed @ 337.11. QQQ might breakout early next week.
    2) QQQ PnF X3 2pt : a conservative count can sent it to targets
    between : 340 and 350.
    3) A more aggressive count can push it higher, much higher.
    4) The rising service sector will pull QQQ up .
    5) There are 14 X’s on the current column vs the Nov jolt with 15 X’s/ column, on much lower volume. More Input/ Less output
    6) This bull run might cont for at least 2 more years with an aggressive count.
    7) It might be an Upthrust after distribution, a terminal phase “C”, that start the markdown

    • Gary Yary says:


      Nasdaq has gone from 3800 in 2014 to 13800 today in 2021. Danger?

      Ones physical body suffers from inflammation…one organ is bad, start a spread to other organs even badder.

      The current economy and the Fed fix seems like it is a runaway incurable cancer originating from the Global Financial Crisis. A house on fire spreading to the neighborhood is another visual to enjoy.

  21. Crush the Peasants! says:

    Areas populated by artists unable to afford suffocating housing costs elsewhere are excellent indicators of future yuppification.

  22. Halsey Taylor says:

    Hildago county decrease is puzzling. What could be driving it? Proximity to the border?

  23. ChrisR says:

    Wait, what, masses of homeless people…in the worlds greatest, (according to some) economy?

    Oh wait a sec’ it’s the old, if you’re doing well it’s down to “xyz party policies,” if not it’s your fault. Yeah right, got it.

  24. Lou Mannheim says:

    The GINI index for the US was 34.7 in 1979. The estimate for 2020 was 48, but that was before the pandemic. I think it is over 50 now, which would make the United States of America more unequal than Angola. No disrespect meant to Angolans, it seems like a fine country.

    This is all by design: all the inflation, tax code revisions, other corporate legislation, expanding the Fed, media control, cryptocurrencies etc.

    When you wonder why equities trade at high multiples, remember that our federal debt has risen from $5T to $28T in 20 years – with so much donor class wealth in 401(k) plans, it will not stop, hence high multiples.

    • Old school says:

      I wouldn’t be so certain. These things tend to go in long cycles. I think we probably are on the verge of a shift and Gini may have maxed out. I was born in 1956 and have definitely seen things I never thought I would see. Gas lines and high inflation seemed like the worse time to me, but maybe this will be worse when we get through it.

      • Lou Mannheim says:

        I hope so, some of Biden’s initiatives seem to support redistribution. But then he hires Yellen, so I don’t know.

        Do you think the oligarchs like bezos or musk are going to opt out of their tony stark lifestyles? That kind of wealth brings power. The corporate structure deserves review, along with governance. They’ve become the primary mechanism of widening inequality, especially with an accommodative Fed guaranteeing their options end up in the money.

  25. R Hughes says:

    Wolf, ref comment above. Perhaps an article on rampant price inflation in building materials. OSB 10 to 50 per sheet, 2 x 4 3.5 to 9, romex 12 2 64 to 98, drywall 1/2 8 to 14. 1,2,3,4 gang blue plastic electrical boxes unavailable, shortages in elect supplies, insulation, drywall, insulation and so on. Cedar almost impossible.

    New home builders saying 12k lumber cost increase for modest home, 40k for medium and 100 k for luxury home.

    New subdivision ( Palm Desert ) was planned for 450k homes, now replanted for 800k homes because could not bring them in at 450k. In desert affordable homes not possible, even Habit has stopped.

    Sun City, original, 4985 houses, used to be a lot of sub 300 resales for 1200 sq ft, gone. Soon won’t be anything under 400k. When built 93 – 03 this was designed as very affordable for seniors. Now only about 12 listings. Remodeling was very active, but shortage of subs, price increases, etc., has really had an effect. People are told kitchen redo a typical 3 week process now plan 3 months and no guaranties.

  26. DR DOOM says:

    It is an old true story from the bible. The poor will always be with you. They are the harvest of empires and their story is told in the iron scheckel that was once gold. Nothing but voyuerisum is the return on investment to end their plight.

  27. Ron says:

    Credit suite will take down whole system

  28. SocalJim says:

    50 year mortgages are starting to appear. Even if they raise rates a little, a 50 year mortgage will keep the monthy payment affordable. This will allow moderate income folks afford the rising prices.

    • Anthony A. says:

      I wonder if the lenders will give a 50 year mortgage to a healthy 75 year old man with 800+ credit and no debt?

  29. CZ says:

    At least some of those RV’s aren’t homeless. I know of 2 $80K millennials living in Sprinters: no rent, no lease, no roommates, Zoom calls via hotspot…

    “It’s like Uber for housing!”

    Not for me, but a money-saving adventure for young people.

    • SocalJim says:

      Those millennials should put 5% down and purchase a home with a 3.2% interest rate before prices move higher. To me, it appears the govt is powerless to stop this inflation spike which might last a few years. The FED has to keep rates low because of the govt’s borrowing needs. So, they will let the inflation go.

      • Lisa says:

        They are already higher. A house that sold for 625k 2 months ago is now valued by the internet realtor sites at720k. Too late? Or wait?

    • Depth Charge says:

      Can you imagine living in a van long term? I sure can’t. I saw a story recently where one of the top “van life influencers,” a young woman in her late 20s with a following of some 500k people, killed herself. It doesn’t sound like the utopia many try to portray it as, but nothing on social media ever is. Social media is a lie, and a scourge upon society, but I digress.

    • Ed C says:

      I’ve heard of homeless people buying memberships to Planet Fitness. For $10 a month they have a place to take a shower. They can also get buff I suppose.

      • Petunia says:

        I hear they can use the showers and if they go at lunch time, the gym serves free pizza. A gym offering free food is a great business model.

    • Lynn says:

      That’s homeless.

  30. Yozíme Río says:

    I guess people in Norway prioritize much better: they don’t pay for education; they don’t pay for healthcare; they don’t pay for this, for that… Guess what? The only thing left is buying a home, finding a job, starting a business… No wonder that Scandinavians show time after time as the happiest people in all surveys while frustrated Americans cannot think of anything else but weapons and using drugs, both legal and illegal, the end result in a society that is a money-driven replication of the jungle.

    • Anthony A. says:

      In Norway, where does all the free money come from to pay for those free services? Enlighten me, please!

      • Ed C says:

        Super high taxes, silly.

        • Fat Chewer. says:

          Actually, no. If you organise it so that you buy in bulk, the price of goods and services reduces over time. Just like anything else. No magic, just thoughtful economic policies. It’s amazing what thoughtful economic policies can do. Healthier people put less stress on healthcare systems. Public housing also helps keep people healthy as living on the streets is very stressful. You seem to be saying that lower taxes are more important than being happy. I disagree.

        • DR DOOM says:

          Norway and its social programs are paid for by oil. That’s right Climate Change Kryptonite. The US uses oil to invade other countries while Norway pays for your health care.It’s not polite to talk about it while you are getting your government services or talking about your new high pressure re-circulating polyethylene glycol solar heating system while you are sipping meade with your friends. We humans love to rub up against all things the bobbing head herd finds virtuous.

        • Craig RESNICK says:

          For many years, we operated a high end boot camp in southwestern France. Among our most plebian clients was
          an Intel junior exec., living in the Paris area,
          We had an interesting conversation regarding taxes and income.
          I asked if there was a different pay scale for his position in California to which he responded that he was paid about 1/3 of what he would be paid in CA.
          When asked if that bothered him, he responded “no, i get more living in France for 1/3 than living in CA— free , quality education for my kids, affordable health care, and a quality of life not possible in the US.”
          My experience regarding the quality of life, in France, is.similar.
          I rarely see homeless people and never see people dumpster diving in McDonalds or supermarkets.
          I would add, the level of education of a typical high school -educated French citizen exceeds that of many college educated Americans. My ninety-year-old neighbor new more about how the futures market operate than many of the floor traders I knew in my previous life as a futures and options trader in San Francisco.

        • RightNYer says:

          Craig, you have to keep in mind when you do these comparisons that the rest of the developed world can get by doing what they do because we basically pay for all of their drug/medical device research and all of their defense costs.

          They can keep their military intentionally underequipped because they know we’ll back them up if necessary. And they know that our “for profit” health care system allows the drug companies to pay for all of the R&D with our money, while they can offer just slightly above the marginal production cost. If we moved to a single-payer system as well, everyone in the developed world would have to pay more.

      • Petunia says:

        They have oil which they use to benefit their people. That would never happen in America.

    • Lou Mannheim says:

      Do you know what the distribution looks like? I wonder if the wealthy are as happy as others – is there a 1% class in Norway?

      • Fat Chewer. says:

        There probably is, but that would happen through a more natural process of families who are simply more lucky in terms of family fortune over the long term, rather than the unnatural process of making the wealthy whole again.

  31. Not to alarm but the process of buying down is soon going to go macro. This is a great depression, with money. In the 30’s money disappeared, in the new 30’s they keep printing cash, while a deflationary vortex opens beneath us. When valuations become absurd, housing or stocks, investors rush into the next lower class of investments. Each time they reallocate downward (toward value), net wealth in the aggregate shrinks. It’s possible as Wolf says, that people will “rediscover” San Francisco, assuming the city infrastructure doesn’t collapse (power pole outside his window) and something is done with the street people. Also possible that when wealthy exurbanites move to small towns where poor planning and industrial sprawl have rendered the landscape unlivable, that they will use their money and their activist tendencies to gentrify these rural burbs. The union vote at the Amazon center in ALA failed, because the workers don’t believe their jobs are worth saving, and of course the progressive government is taking care of health, unemployment and rent control. Driving up the cost of housing in these places should really spike the misery index.

  32. GirlInOC says:

    It’s funny to me how we all look back at history & the old fuedal systems & think we are so far removed from that, from serfs paying their whole livelihoods to land rents.
    Meanwhile landlords here brag about being able to raise rents at the smallest possibility of increase in demand.
    Wolf said it best “we can’t outbuild” demand from investors in their quest to profit. We need robust social housing, STAT.

    • Ed C says:

      “We need robust social housing…”
      So in other words you want me to pay for other peoples’ housing costs.
      No thanks, I already gave at the office.

      • Whatsthepoint says:

        You are already paying for “other people’s stuff”…property taxes for schools even if you don’t have kids, higher medical costs because of all the uninsured, not to mention all the pork buried in the MIC, FIC and the rest of the corporate trough…you’re paying and what exactly do you get for it? Social housing at least keeps people off the streets so you don’t have to step over or around them “other people. ” Typical septic!

    • Old school says:

      I generally disagree with about everything you say but our experiences are different. I do like the idea of social housing kind of like habitat for humanity. Much of home building for modest dwellings can be built with a lot of unskilled people if supervised. This would seem to be a good situation for young people who have healthier bodies than old and with a skilled person around could build pretty cheaply maybe saving 1/3 the cost of a dwelling. Like a modern barn raising.

  33. GW says:

    This is money printing for the rich and asset inflation on its way transforming into measurable real inflation. Housing expenditures for the broad population will ‚trickle down‘ to wage demands and will spread to a broader set of not so hedonistically adjustable goods in the basket.

  34. Depth Charge says:

    Bernanke the narcissist spouted off about the Great Depression and said it was caused by the central bank not printing enough. So he vowed to print more. What he learned about the housing meltdown under his watch was that the FED still didn’t do enough, so the message among all these thieves is MORE, MORE, MORE. And that’s exactly what they are doing, and this time they are heavy into mortgage backed securities.

    The FED thinks they can corner the entire housing market and prop it up. They will end up being the largest single family house owner in the country by way of their balance sheet, and that’s just fine with them. They will create an entire country of zombie houses with shoeless, filthy plebs walking around with nothing to their name.

    • Lynn says:

      Blackstone is managing their money I’ve heard.. You are not wrong.

      • Wolf Richter says:


        That’s not correct, on several levels. Only about $10 billion of the Fed’s $7.5 trillion (with a T) are managed by bond fund managers, and BlackRock (not Blackstone) only has a small slice of that $10 billion, and it’s a program that has now expired.

        • Lynn says:

          Thanks Wolf. I am very glad to be wrong on that. I hope they don’t sell off foreclosed mortgages in bulk to large corporations like they did last time. Or to politicians.

    • Swamp Creature says:

      Bernanake should go back to being a waiter which was his former job I understand. OOOps, that would an insult to all the good waiters out there.

  35. Hernando says:

    Spoke to a friend of mine. He said the new builds in affordable houses are being built and then bought up to 4 at a time by out of towners looking for investments to rent.

    I don’t know about the veracity, but it is a small town and everyone knows everyone.

  36. gary says:


    I had no idea we would have a COVID crisis to cause this, but that is just ancillary. It was going to happen regardless.

    Furthermore, the so-called “declining” areas will start RISING again (due to some yet unforeseen reason). So higher prices all around.

  37. Rcohn says:

    What characteristic separated the US economy from other countries in the past ?
    A large and growing middle class
    Now we have the highest GINI coefficient in the US history with the top 1% gathering more and more wealth , a growing % of lower income people, many of whom are subsidized directly by the federal government and a diminishing middle class , who among other things are paying an increasing % of their income for housing
    Sounds like more like Venezuela, than the US

    • MonkeyBusiness says:

      Americans worship money and power. They just don’t go out and say it.

  38. Swamp Creature says:

    The housing inflation is now reaching the blow-off stage. This is the stage when all sanity goes by the wayside. With everyone expecting interest rates to rise in the very near future the vulcher real estate agents, hungry for commissions in a market devoid of adequate listing are using this fear to drive new home buyers into the market at a time when they can ill afford it. We just did a Condo which had a contract for 20k over the prevailing comparable condos in the area. We will be cutting the case by the 20k, in which case the deal will fall through, unless the buyer somehow comes up with the difference in cash which they don’t have. The real estate agents and brokers will lose their commissions, The lender will lose their underwriting fees, the loan officer will lose their 1% commission. The VA will lose their funding fee. The State will lose their 2% transfer tax The seller will be unable to move, and the buyer will be very unhappy. I’m expecting the hate mail will be flowing in to the point where it completely fills up our mailbox. We collect our $525 fee for the appraisal and we’re done with all of these people.

    • El Katz says:

      Let the realtors pitch in the $20K out of their commissions…… easy peasy. Makes the seller “whole” and the buyer doesn’t over pay.

    • crazytown says:

      Nice to hear that some chain in the real estate industry has some ethics. I was under the impression that appraisals always magically come in riiiiiiiight above where it needs to be to facilitate the sale.

      Everything in real estate seems to he designed to grease sales along to line the pockets of the rent seekers.

      • Swamp Creature says:

        Pretty true for the most part but appraisers don’t work for the Realtors. Its an adversarial relationship. They work for the lender via the Veteran’s administration which insures the loans. The lenders don’t want to make loans which are not backed by proper collateral. Its not like 2006.

        • Whatsthepoint says:

          Sorry, Swamp, but when I worked as an appraiser back in the day, the pressure from the loan agents and underwriters was intense to “bring it in” at the sale price or refi value. Miss too many and business would dry up…

        • Swamp Creature says:


          Those days are over. Lenders now are very cautious about inflated appraisals. They don’t wan to get burned either. The only pressure we get is from crooked Real Estate agents who want to make the deal go through so as to get a commission. There’s a lot of them out there.

  39. Hernando says:

    I’m curious about anyone’s take on the Housing data for this month regarding delinquency rates, starts, and new home sales.

    • Swamp Creature says:

      I’m wondering if Wolf has any new data on delinquency rates? 4th quarter 2020 in particular. VA loans. We put this in our reports.

      • Wolf Richter says:

        This data by the Mortgage Bankers Association is a little different than some of the other data (FHA) I’ve posted for two reasons:

        1. It’s “seasonally adjusted.”

        2. It doesn’t include delinquent mortgages that are now in forbearance since bankers consider delinquent mortgages in forbearance as “performing.”

        The actual VA delinquency rate would therefore be higher than the 7.29% stated here:

        • Swamp Creature says:

          Thanks Wolf,

          You just scored some major brownee points with Ms Swamp Creature.

  40. Rowen says:

    Here on the South Carolina coast, “Charleston Rich” are being gentrified by “NYC Rich”. The former being doctors/lawyers/real estate pros who had net worth between 5-20M, the latter being Big Finance with 100M+ net worth.

    NYC Rich are bringing their price structure down here with them. $150K to paint a 5000 sq foot house? My contractor friends are laughing all the way to the bank.

    • Depth Charge says:

      Exterior painting can get pricey, especially if it’s a large house with a lot of architectural detail and multiple colors. I was restoring a grand old Craftsman style house back in 2003. It was 3 stories including the finished, walk out basement. The lowest bid to paint it (3 colors) was $50,000. The homeowner offered me $40,000 to do it, figuring I might bite since I was doing the majority of the other work. I turned it down. It was on a hill, needed major scaffolding, etc. No thanks. More of a hassle than I ever wanted to deal with. These days the job would probably be pushing $100,000. These are not quick jobs.

      • Swamp Creature says:

        I got my house painted 10 years ago for 3K. They did one heck of a job.

        • Depth Charge says:

          With all due respect, this is not a 3/2 single story rancher. It’s a massive old house on a hill in a historical district.

      • OutsideTheBox says:

        That must have been a structure with the size and historical value of the White House !

        Around here painting a house runs under 4K.

  41. DawnsEarlyLight says:

    On a captivating note, the cost to jail prisoners locally increased nationally, due to prison lower acceptance rates in limiting the spread of Covid-19.

  42. The General says:

    Hi Wolf,

    Are you able to find rental supply data? Perhaps Zillow? I am curious if some locations that are experiencing higher prices such as Baltimore and Detriot are driven by “adverse selection”. As a part-time Landlord, I watch updates from the AAOA on eviction bans. I have read estimates that the cost to evict is $3.5k (almost two months rent!).

    • Michael Gorback says:

      Baltimore is not part of Baltimore County. There has been an ongoing exodus from the drug and crime ridden City to the County for many years.

      Having grown up in Baltimore County, I’ve been astonished every time I go to visit family at how places that used to be forsaken boonies are stuffed with apartments and houses.

      The only thing that surprises me is that there are still enough affluent people left in the City to move to the County and move prices so high.

      I bought a house here south of Houston 2 years ago. Then I started to notice for sale signs popping up. That kind of spooked me because the last I saw that was 2008.

      Pretty soon there were more and more houses for sale, but I noticed they were getting scooped up fast. I checked my house value on Zillow last week and it’s valued at 15% more than I paid for it.

      I also noticed that one of my favorite brunch places kicked up the price of their prix-fixe 4 course brunch by about 15%.

      • The General says:

        That is true, but it surrounds Baltimore. Honestly, people are starting to flee the nearby VA & MD counties and head out to WV.

  43. GeeWhiz says:

    Will taxing the capital gains at 75 to 80% help? Everything is up for speculation so it might knock the incentive to do this. The stock market casino is where most of the wealth and action is any way.

  44. gardener1 says:

    We’re very much intending to leave Seattle, our son lives in Montana.

    In his town of about 35,000 I’ve been looking at rentals for months. There are never more than three or four rentals in the entire town and prices are almost commensurate with Seattle. That’s crazy.

    People are fleeing the communist west coast by the thousands and pushing up prices even in the most unexpected places.

    • Wolf Richter says:


      Why the heck are you then still in Seattle if it’s such a terrible communist place? I never understood this. If you hate a place, pack up and leave. You might not be able to that in a communist country, but you can do it on the West Coast, no problem. Oklahoma is lot cheaper than Montana. Tulsa is paying work-from-homers to move there.

      • Michael Gorback says:

        I’ve started buying land in Oklahoma but with the drought predictions for the West, it might be better to wait and see before buying more.

        If ranches and farms go belly up there will be fantastic opportunities. I know this comes off as being predatorial but I’m not hoping for another Dust Bowl, just anticipating whats likely to happen.

        Take a look at the map of the anticipated drought. Las Vegas is in a severe drought zone and Lake Meade is at 11% capacity.

        Here’s the latest from NOAA. Look at the west. I’ve warned my kids that wars will be fought over fresh water.

        • Wolf Richter says:

          The weed industry is booming in OK. Which is nice to know because when I was living there as a young person, it was also booming, but people got thrown into the hoosegow for it.

          Plus, you can join the crowd and put a few wind turbines on your land and make money from wind, of which there is an endless and plentiful supply in Oklahoma.

  45. Rexx Rock says:

    I live in Victoria B.C. and its so unaffordable. If your renting ,life is very hard unless you have roommates. I was in Puerto Vallarta for November and December. It was wonderful, almost normal unlike Kanadastan.
    You can live quite nice in Mexico for $1000 cad a month easy. There is absolutely no value to live and work in Canada if your young and want to have a home and family. None the low wages and high cost of living are soul crushing. The P.M. is a complete train wreck.

  46. Hernando says:

    I’m not sure if Fresno kern or Tulare data is good for anything

    As a refugee who left that area long ago, when there is advantage to be gamed and money is involved data is corrupted – that is the politest way I can think of stating the obvious.

    Many folks from that trifecta of hell will not pay rent or mortgage not because they can’t but because it is expedient – and it’s a lot more fun in Pismo than paying rent. Add the stimulus along with enhanced unemployment benefits and under the table work and you have a bonanza.

    That is the Central Valley- who the heck would leave a free rent free mortgage situation with stimis etc etc?

    I got your supply shortage on housing and rentals right there.

  47. Chris Herbert says:

    I’m apparently being blocked, but here goes anyway. The $1.9 trillion tax cut four years ago fueled an asset bubble. Anything that wasn’t nailed down was bid up. The cure? Simple: Tax those who are bidding up prices, and send money to those who will create real demand.

    • Wolf Richter says:

      Chris Herbert,

      I’ve told you before, you’re one of the blatant MMT trolls out there. But on my site, only your blatant MMT propaganda gets deleted. So you might as well stop posting it because it just wastes your time and my time.

      Your other comments are good and are published.

  48. rick m says:

    Regarding the Amazon union vote, they didn’t want to have to pay union dues and assessments, and feared reprisals, like corporate pulling up stakes and leaving them without jobs. That’s a common but presently even scarier idea. A job is normalcy when societal disruption is driving people crazy. And Amazon has a nasty rep. Alabama is highly competitive in luring corporate employers instate and won’t want them to see bad labor imagery. My thoughts anyway.
    I must be the only one who thinks buying a house right now is ill-timed. Relatively low finance seems to be the advantage, i don’t see any other beyond special situations and insider information. Any long term investment makes assumptions about the future, and everybody piling into the same trendy “thing” just exacerbates the pain when the “unforeseen” future messes up their plans. Man plans, God laughs. I rent from distant siblings, a block from the beach, water to the window tops during Katrina, there will be real estate bargains post-correction for creditworthy investors with unencumbered resources and a sharp eye towards tax avoidance. Lemming behavior has never done much good for individual lemmings.
    Storm Insurance worked when premiums returned big profits in expanding markets and subsidized covered payouts, the institutional investors took hits to that profitability and Katrina was bigger than honoring contracts with little people, so wind/water got invented. Sixteen years ago and State Farm and Allstate are still smelly names around here.
    Hurricane season starts June 1

  49. Mike says:

    I live in Bend OR. Prices are through the roof. Every house that sells around here have WA an CA plates. Especially the expensive houses. I’m from Michigan, I can’t understand these prices.

  50. LionelMandrake says:

    Outsourcing is the problem. 20 percent tariff is the solution.

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