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Housing Prices Up 23%, Hit New High for June

Posted by Sami Thalji | Jul 26, 2021 | 0 Comments

Housing prices continue to climb in the month of June and it seems a major contributing factor to continued rising prices is the entry of hedge fund and investor money in the market. This is good for homeowners looking to sell their homes and take advantage of this hot market (only if they're not looking to buy a new house). But, in the big picture I'm not sure this is good for the overall consumer economy. Hedge funds and investors are essentially pricing first time homebuyers out of the market. In the bigger picture this means that big corporations are in the process of buying our homes and making private home ownership a thing of the past. Home mortgages have traditionally been viewed from two distinct lenses. First, buying a home provides a path to growing household wealth for many families. As your home value appreciates equity grows and as equity grows a household's net worth grows along with it. on the other hand, mortgages were invented by banks to lock people into 30 years of interest payments and with the refinancing a possible lifetime of interest payments. The Great Recession destroyed the notion that owning a home always grows household wealth. Furthermore, this new market where corporations purchase all the homes and slowly drive out private ownership presents a big downside to everyday consumers. Namely, corporations are phasing out banks and instead of paying interest with the hope that your home value will appreciate, consumers will now pay rent, which will surely continue to become more expensive, with no hope of growing household wealth. The biggest downside of all is that once the housing market is controlled by a few wealthy corporate interests prices can and will be manipulated. There is no way to know how this turns out, but I tend to believe we will start seeing more tent and RV communities popping up in the next few years as the cost of renting eventually begins to outgrow affordability.  

About the Author

Sami Thalji

Sami Thalji is a native Floridian, born in Clearwater and raised in St. Petersburg, Florida. Sami graduated from Osceola High School in Seminole, Florida before attending and receiving both his Bachelor of Science and Juris Doctor from the University of Florida in Ga...

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