U.S. Still Experiencing A Housing Crunch

One of the huge things caused by the Republican recession is unemployment, and it gets plenty of press coverage. But another part is the housing problem in America, and the press hardly covers it al all anymore. But that doesn't mean it isn't a serious problem anymore. The huge loss of millions of jobs and the meltdown of the deregulated stock market (in large part due to unsustainable sub-prime housing loans) combined to put far too many Americans in the position of no longer being able to afford the homes they were in.

This caused a record-breaking amount of home foreclosures -- and the amount of home foreclosures is still much higher than in a healthy economy. It remains a problem for the country. But there is now another problem which is adding to the housing crunch. Banks are very timid in making new housing loans, even for people who want to buy a home and can probably afford it.

Last year, home lending fell to about $404 billion. That may sound like a lot of money, but its less than a third of what it was in 2006 (when it was $1.4 trillion). It's resulted in new home sales being about a million a month below what is considered healthy for this economy. This is caused by the banks becoming much more strict in who they will lend money to. Most banks won't give loans except to customers with credit scores above 762 -- a problem since 65% of Americans now have credit scores below 750.

The continued high level of foreclosures combined with a huge reluctance of banks to make new home mortgages, have led to a third problem -- a huge jump in rental prices. If a family loses their home, or cannot buy one because of the tight credit, their only option (other than maybe moving in with relatives) is to rent a place to live. But even that is getting much harder to do, as available apartments are becoming scarce and their rental price keeps going up.

I'm experiencing that on a personal level. A few years ago the apartment complex I live in was begging for tenants and offering big discounts for new tenants and for those who recommended them. That is no longer true. Now the complex has raised its rental prices every year for several years and made the guidelines for getting an apartment fairly strict. It has been a huge change in just a few years, as apartment complexes can now afford to be picky and charge what they want -- since apartments are at a premium.

All of these pressures (foreclosures, bank reluctance to lend, and rising prices & less availability of apartments) have combined to put serious pressure on Americans. It has led to a serious lack of affordable housing -- and for many (an ever-increasing number) it has led to homelessness. Millions of Americans, who used to have a good job and a nice place to live, are now finding themselves not only jobless but also homeless.

I'd like to think that the government knows what to do about this and is working on solving it. But that would just be wishful thinking. The Democrats don't seem to know what to do, and the only solution the Republicans have for anything is to give the rich more huge new tax cuts. They should all be ashamed.