Housing is Unaffordable for Young People

[Mike Ault]

No I don’t. If I did I would spend my entire in the water cooler.

Come on in, the water's fine.

 

[timd354]

Milton Friedman and Paul Volker are two American villains who sold workers down the drain to save creditors. It was nice when Ameica produced things like cars and washing machines. Now, the only thing this Country produces is collateral debt obligations.

You got it wrong about Volcker. First of all, it was Volcker who saved the US economy in the early 1980's by having the guts to kill off stagflation by raising interest rates to very high levels in spite of huge protests and pressure placed upon him. After he got inflation under control, his next concern was the trade imbalance with Japan and Europe, which he did his best to address through the Plaza Accord, which resulted in the devaluation of the dollar, making American exports more competitive and imports to America more expensive. While this successfully reduced the trade imbalance with Europe but did not work with Japan as the Japanese had setup a raft of trade barriers on imports that could not be overcome. People forget that Volcker was actually appointed by Carter and was later an Obama guy. Volcker was also a guy who called for much stricter regulation of banks.

 

[Terrel L. Shields]

I was a teenager in the 1970's

Youngster... I graduated from college months before OPEC embargoed the US over the Yom Kippur War. But even before then, gas was in short supply, stations were closing at 5 and all day Sunday. I was working in a soils and concrete lab at the time. Work there collapsed as builders couldn't give houses away. A lot of houses then were also uninsulated or only had a few inches in the ceiling. Their electric and gas bills went through the roof. An entire FHA subdivision was abandoned by the owners. The all-electric bills were higher than the mortgage. Insulation cost also doubled as homes scrambled to add insulation, install double pane windows, and almost every new home now included a fireplace.

One thing that exacerbated the crisis was there were tankers being held off-shore and not unloading crude oil because traders were buying the crude oil and holding it to arbitrage the increasing prices. Millions of barrels of oil was not making it into the Houston refineries and was simply being traded for ever higher prices. I knew a couple who got filthy rich in this oil trading scheme.

By January 74, I had quit and went to work in the Oil Patch. I went to W. Virginia on an Exxon credit card, was paid $50 a day. I paid 50 cents a gallon for the first time in W. Virginia and by a month later it was over 60 cents, this was basically the same price as today in real money, but the difference was the average car got 12 mpg not 30. There were long lines at the pumps in many areas. I was sent from W. VA to Texas where gas prices were 44 cents or so...about the cheapest in the nation. I applied and was accepted to graduate school because I was working for some folks that were not trustworthy and I feared I would eventually get stiffed...which I did for a few days work once. I returned to the oil patch in 77 and construction was just beginning to start up only to falter and was weak into the early 80s. A new 1,200 SF house cost about $28,000 or less to build at the time but high interest rates made it very difficult to finance. Outside of FHA, or a Farm Credit loan, interest rates could approach 12-15% if you could even find a bank that was lending anything.

 

[Terrel L. Shields]

You got it wrong

Volcker saved us from the highest of inflation, restored trust in the dollar by controlling the M1 money supply, and Milton was exactly right about government spending being a negative and Keynesian economics was a bad thing. It still is, but our government has never tried anything else since the depression. Spending your way out of debt is dumb on the face of it.

 

[timd354]

Youngster... I graduated from college months before OPEC embargoed the US over the Yom Kippur War. But even before then, gas was in short supply, stations were closing at 5 and all day Sunday. I was working in a soils and concrete lab at the time. Work there collapsed as builders couldn't give houses away. A lot of houses then were also uninsulated or only had a few inches in the ceiling. Their electric and gas bills went through the roof. An entire FHA subdivision was abandoned by the owners. The all-electric bills were higher than the mortgage. Insulation cost also doubled as homes scrambled to add insulation, install double pane windows, and almost every new home now included a fireplace.

One thing that exacerbated the crisis was there were tankers being held off-shore and not unloading crude oil because traders were buying the crude oil and holding it to arbitrage the increasing prices. Millions of barrels of oil was not making it into the Houston refineries and was simply being traded for ever higher prices. I knew a couple who got filthy rich in this oil trading scheme.

By January 74, I had quit and went to work in the Oil Patch. I went to W. Virginia on an Exxon credit card, was paid $50 a day. I paid 50 cents a gallon for the first time in W. Virginia and by a month later it was over 60 cents, this was basically the same price as today in real money, but the difference was the average car got 12 mpg not 30. There were long lines at the pumps in many areas. I was sent from W. VA to Texas where gas prices were 44 cents or so...about the cheapest in the nation. I applied and was accepted to graduate school because I was working for some folks that were not trustworthy and I feared I would eventually get stiffed...which I did for a few days work once. I returned to the oil patch in 77 and construction was just beginning to start up only to falter and was weak into the early 80s. A new 1,200 SF house cost about $28,000 or less to build at the time but high interest rates made it very difficult to finance. Outside of FHA, or a Farm Credit loan, interest rates could approach 12-15% if you could even find a bank that was lending anything.

I remember as a small child that the cost of gas was 29..9 cents for regular and 31.9 cents for hi-test and that price never changed for years and years until the oil crisis hit, and then the price of gaoline qucikely went to around 45 cents and then to 60 or 65 cents.. I also remmber seeing the lines of cars backed up for blocks at the neighborhood gas station and I also remember that, for a time, you could not even buy gas on certain days depending on the number on your license plate - Cars with license plates ending in an even number were allowed to buy gas on even days of the month and cars with a license plated number that ended in an odd number were permitted to buy gas on odd days. We were lucky as my family had two cars and one had an even numbered plate while the other one had an odd-numbered plate. I also remember that my dad would top-off the gas tank whenever the opportunity presented itself (gas station without crazy long lines on the designated odd/even days) even when the gas tank was still more than half full as you never knew whether there would be any gas available without a huge wait in the coming days.

 

[Terrel L. Shields]

remember as a small child that the cost of gas was 29..9 cents for regular

An old 1950 Chevy ton and a half truck that put me thru college hauling hay got about 10-12 mpg from a six-cylinder engine. We often had "gas wars" during summer and enjoyed gasoline at 22.9 prices up to 29.9. We probably averaged no more than a quarter per gallon in summer. PS-I'd love to have a brand new 1950 Chevy Truck just like it.

 

[ucbruin]

College tuition was cheap back then....

 

[Mejappz]

You got it wrong about Volcker. First of all, it was Volcker who saved the US economy in the early 1980's by having the guts to kill off stagflation by raising interest rates to very high levels in spite of huge protests and pressure placed upon him. After he got inflation under control, his next concern was the trade imbalance with Japan and Europe, which he did his best to address through the Plaza Accord, which resulted in the devaluation of the dollar, making American exports more competitive and imports to America more expensive. While this successfully reduced the trade imbalance with Europe but did not work with Japan as the Japanese had setup a raft of trade barriers on imports that could not be overcome. People forget that Volcker was actually appointed by Carter and was later an Obama guy. Volcker was also a guy who called for much stricter regulation of banks.

---

I got it right on Volcker. Sure, he tamed inflation, but he did it by jacking up interest rates so high that he handed the entire economy over to creditors. What you’re not addressing is how Volcker’s policies normalized usury—turning debt into the backbone of American life. Before him, state usury laws kept lenders in check, capping interest rates so people weren’t gouged just to buy a home or start a business. But thanks to the 1980 Depository Institutions Deregulation and Monetary Control Act (DIDMCA), which he backed, banks could now charge whatever they wanted. That’s why today, people are stuck with 30% APR credit cards, predatory payday loans, and mortgage rates that keep homeownership out of reach.

And let’s not forget—most civilizations throughout human history have banned usury because they understood the damage it does. The Bible condemns it, the Quran outright forbids it, and even ancient Greeks and Romans put limits on excessive interest. Why? Because they knew that once lenders control the economy, workers become debt slaves. Volcker didn’t just fight inflation—he set the stage for an economy where banks profit off endless debt, while regular Americans sink deeper into it. You can praise him for his "guts" all you want, but the legacy he left behind is one where the working class doesn’t earn wealth—they borrow it at insane interest rates.

 

[Joe Flacco]

---

I got it right on Volcker. Sure, he tamed inflation, but he did it by jacking up interest rates so high that he handed the entire economy over to creditors. What you’re not addressing is how Volcker’s policies normalized usury—turning debt into the backbone of American life. Before him, state usury laws kept lenders in check, capping interest rates so people weren’t gouged just to buy a home or start a business. But thanks to the 1980 Depository Institutions Deregulation and Monetary Control Act (DIDMCA), which he backed, banks could now charge whatever they wanted. That’s why today, people are stuck with 30% APR credit cards, predatory payday loans, and mortgage rates that keep homeownership out of reach.

And let’s not forget—most civilizations throughout human history have banned usury because they understood the damage it does. The Bible condemns it, the Quran outright forbids it, and even ancient Greeks and Romans put limits on excessive interest. Why? Because they knew that once lenders control the economy, workers become debt slaves. Volcker didn’t just fight inflation—he set the stage for an economy where banks profit off endless debt, while regular Americans sink deeper into it. You can praise him for his "guts" all you want, but the legacy he left behind is one where the working class doesn’t earn wealth—they borrow it at insane interest rates.

Wow, i never knew that was the result of Volcker.

 

[Terrel L. Shields]

That’s why today, people are stuck with 30% APR credit cards, predatory payday loans, and mortgage rates that keep homeownership out of reach.

And people in regulated states couldn't get a credit card or the card was limited to $200 - $400. I couldn't even use my card to buy a month's worth of gas in 1980 for $400. I got a nasty letter from them every month and threats to cut off my card. I had to get an American Express card to buy gas and motel in the oil patch. And people were crossing the state line to get a loan outside of the regulated states. And people who had cash for a CD went out of state to deposit it. It was draining a lot of states.