{"id":577205,"date":"2021-06-30T10:51:11","date_gmt":"2021-06-30T14:51:11","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=577205"},"modified":"2021-06-30T10:51:16","modified_gmt":"2021-06-30T14:51:16","slug":"how-the-government-is-distorting-the-housing-market","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/how-the-government-is-distorting-the-housing-market\/","title":{"rendered":"How The Government Is Distorting The Housing Market"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fhow-the-government-is-distorting-the-housing-market%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=577205&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/06\/GettyImages-1264127590-1-1200x800-1.jpg\" class=\"ff-og-image-inserted\" \/><\/div>\n<p><span>The American housing market is red hot.<\/span><\/p>\n<p><span>One recent Zillow <\/span><a href=\"https:\/\/www.dailywire.com\/news\/report-average-home-is-staying-on-the-market-for-only-6-days\"><span>report<\/span><\/a><span> revealed that the average American home is only staying on the market for roughly six days. In some cities \u2014 such as Cincinnati, Kansas City, and Columbus \u2014 the typical period on the market is as low as three days.<\/span><\/p>\n<p><span>Economists see no end in sight to this phenomenon. Zillow\u2019s analysts forecast a further 6.1% increase in housing costs by August, a 17.9% increase between December 2020 and December 2021, and a 14.9% increase between May 2021 and May 2022.&nbsp;<\/span><\/p>\n<p><span>The average American home value has grown by 13.2% since May 2020. Between the first quarter of 2020 and 2021, homeowners <\/span><a href=\"https:\/\/www.cnn.com\/2021\/06\/10\/homes\/home-equity-growth-feseries\/index.html\"><span>saw<\/span><\/a><span> an equity gain of $2 trillion.<\/span><\/p>\n<p><span>Many factors are contributing to the rise in housing prices.<\/span><\/p>\n<p><span>On the supply side, construction of new long-term housing has steadily <\/span><a href=\"https:\/\/www.housingwire.com\/articles\/us-housing-market-is-short-5-5-million-homes-nar-says\/\"><span>slowed<\/span><\/a><span> over the past several decades such that there are 5.5 million too few homes available. Meanwhile, rising costs for lumber, steel, copper, and other raw materials are <\/span><a href=\"https:\/\/www.cnbc.com\/2021\/04\/30\/soaring-lumber-prices-add-36000-to-the-cost-of-a-new-home.html\"><span>adding<\/span><\/a><span> nearly $36,000 to the price for an average new single-family home. On the demand side, Americans are <\/span><a href=\"https:\/\/www.cnbc.com\/2021\/06\/29\/home-price-gains-in-april-truly-extraordinary-sp-case-shiller-says.html\"><span>moving<\/span><\/a><span> from urban homes to suburban homes \u2014 in large part because of COVID-19 lockdowns.&nbsp;<\/span><\/p>\n<p><span>Another demand consideration \u2014 low interest rates for mortgages \u2014 is best understood in light of another pressing economic phenomenon that reaches far beyond the housing market.<\/span><\/p>\n<p><span>As the United States economy rebounds from COVID-19 and the lockdown-induced recession, the Federal Reserve is pursuing aggressive quantitative easing to aid in the recovery. In essence, the Fed \u2014 which controls monetary policy in the United States \u2014 is buying $120 billion in assets from the private market in order to stimulate economic activity by increasing the supply of the dollar. The Fed\u2019s asset purchases cause American businesses and consumers to hold liquid cash rather than illiquid bonds, facilitating more short-term purchases and thereby spurring economic activity.<\/span><\/p>\n<p><span>The end goal of the Fed\u2019s quantitative easing is to manipulate the \u201cfederal funds rate\u201d \u2014 the interest rate at which private banks can lend to each other overnight. The Fed is currently targeting a near-zero federal funds rate; as a <\/span><a href=\"https:\/\/www.investopedia.com\/articles\/investing\/010616\/impact-fed-interest-rate-hike.asp\"><span>result<\/span><\/a><span>, other interest rates in the economy \u2014 such as the bank prime loan rate and three-month CD rate \u2014 are low as well.<\/span><\/p>\n<p><span>The reality extends to mortgage rates, which are at their lowest <\/span><a href=\"https:\/\/fred.stlouisfed.org\/graph\/?g=NUh\"><span>levels<\/span><\/a><span> in modern history. At least partially due to quantitative easing, it is far less costly for American home buyers to take out a loan and purchase a house, leading to an increase in the number of homes demanded. The entrance of more would-be buyers into the market increases competition for houses, which in turn causes prices to rise.<\/span><\/p>\n<p><span>Although the Fed\u2019s low interest rate target is distorting the housing market \u2014 and leading to rampant inflation \u2014 policymakers do not <\/span><a href=\"https:\/\/apnews.com\/article\/fed-expects-key-rates-near-zero-through-2023-9b9a335a1ce05d69fc97a1d6197371ab\"><span>intend<\/span><\/a><span> to raise interest rates until 2023. And, as reflected by analysts\u2019 expectations, the housing market may continue its current trajectory for the foreseeable future.<\/span><\/p>\n<p><i><span>The views expressed in this opinion piece are the author\u2019s own and do not necessarily represent those of The Daily Wire.<\/span><\/i><\/p>\n<p><i><span>The Daily Wire is one of America\u2019s fastest-growing conservative media companies and counter-cultural outlets for news, opinion, and entertainment. Get inside access to The Daily Wire by becoming a <\/span><\/i><a href=\"https:\/\/www.dailywire.com\/subscribe\"><i><span>member<\/span><\/i><\/a><i><span>.<\/span><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The American housing market is red hot.One recent Zillow report revealed that the average American home is only staying on the market for roughly six days. In some cities \u2014 &#8230;<\/p>\n","protected":false},"author":1,"featured_media":1891881,"comment_status":"close","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-577205","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/577205","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=577205"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/577205\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1891881"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=577205"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=577205"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=577205"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}