By the time millennials hit retirement age, the typical home in this country will cost $1 million. That will be the median price of a home, not just new homes, but any home, by 2050. By comparison, the national median sales price for existing homes is roughly $430,000.
00:04:24.980Going back to the 50s, even through the 2008 financial crisis,
00:04:28.340the surveys of consumer sentiment were not as dire as they are right now.
00:04:33.200So while it may be the case that people like Micah could theoretically purchase a home somewhere
00:04:37.580if they're willing to make more compromises,
00:04:40.660the fact remains that they aren't doing that.
00:04:44.040Lots of people aren't doing that. And we need to figure out why.
00:04:48.280And I'm not cherry picking anecdotes or statistics here. Every possible indicator
00:04:51.920is sending the same signal. Here's another one. Real estate agents are quitting in droves right
00:04:57.640now. It's another thing you might not have heard about. This is data from the National Association
00:05:01.780of Realtors. It shows the number of members in the Realtors Association, the light blue,
00:05:06.000and the number of existing homes for sale, which is the darker line, from 2012 to 2022,
00:05:12.920membership in the association grew every year, and now it's steadily declining.
00:05:19.720The association of realtors now has just 1.4 million members compared to 1.6 in October 2022.
00:05:27.000And as the chart shows, for most of this century, there have been far more homes for sale than
00:05:32.740realtors. And that's the kind of ratio you want. That's a healthy ratio. But that hasn't been the
00:05:38.300case for several years now. Realtors are competing over a very small number of homes,
00:05:42.360And on top of that, a recent legal settlement means that realtors have to disclose their fee up front, which is leading many homebuyers to handle the process themselves, which also isn't helping things for the industry.
00:05:51.880So to give you an idea of how quickly the housing market has become unaffordable, take a look at this chart from the Wall Street Journal just the other day.
00:05:59.640They're getting their data from the Intercontinental Exchange, Angie, and the Labor Department.
00:06:05.760if you're buying a home now as opposed to 2019, then on average, you're paying 22% more in
00:06:14.320principle. This is just from 2019. Again, 35% more in interest, 31% more in property tax,
00:06:21.46072% more in insurance, 85% more in home maintenance, and 175% more in emergency
00:06:29.820repairs. So your total annual bill is 40% higher than it would have been just six years ago.
00:06:38.700It's like catastrophic. If you're the average American, your annual expenditure on housing
00:06:43.880went from $20,600 to $28,500. It's almost $30,000. And it's worth taking a brief detour
00:06:54.260though. We also mentioned property taxes. It's worth taking a brief tutorial to focus in on the
00:07:00.160property tax figure. Home prices are going up around the country, and so are property taxes.
00:07:05.460And the fun thing about a property tax, of course, is that you can never pay it off. It's an expense
00:07:09.580that the government tax on money that you owe them simply because they say so, money you owe
00:07:15.400them as a penalty for committing the sin of buying property. And there's no end point. There's no
00:07:21.700such thing as a final payment. CBS News reported recently, quote, property taxes across the U.S.
00:07:27.600are rising faster than inflation, with the average homeowner last year paying $4,427, up
00:07:33.7403.7% from 2024, according to a new analysis from real estate data firm ATTOM. By comparison,
00:07:42.720the Consumer Price Index, a basket of commonly purchased goods and services, rose 2.7% last
00:07:47.580Your homeowners in some states have faced considerably larger property tax increases, including an 18 percent hike in Delaware and a nearly 12 percent jump in Maryland.
00:07:57.540So it seems like if it seems like there's some sort of conspiracy to deliberately make owning a home as expensive as possible.
00:08:07.280Now, back to the journal report, quote.
00:08:09.660Sales of previously owned homes have held around $4 million a year since 2023, the lowest level in decades, and down from a pre-pandemic norm of between $5 million and $5.5 million a year, according to the National Association of Realtors.
00:08:24.280That means fewer prospective buyers are accessing homeownership, and many of those who are buying homes are stretching their budgets to do so.
00:08:32.740Those new homeowners are vulnerable to falling behind on payments if their incomes drop or they face unexpected jumps in homeownership costs.
00:08:41.220A buyer with a $2,500 monthly budget and a 20% down payment can afford to buy a $517,500 home at a 3% mortgage rate,
00:08:51.140according to real estate brokerage Redfin. At today's rate, around 6.5%, that same buyer can
00:08:56.240only afford a $384,000 home. Even though rates have climbed, typical home values remain near
00:09:02.480record highs, according to Zillow, confusing many buyers who have been waiting for prices to fall.
00:09:09.660And the last part is important. Normally, when interest rates go up,
00:09:12.720you expect home values to go down, and you're paying more for interest over time, so you expect
00:09:17.380that your upfront costs will be lower. This is normally how things work. And it makes sense that
00:09:23.700it would work that way. But in practice, that's not happening anymore. In most markets, there's
00:09:28.160nothing to offset the high interest rates at all. The homes have higher list prices and higher costs
00:09:35.740over time. It's a lose-lose. One of the reasons that the conventional wisdom doesn't apply anymore
00:09:40.600is that nobody wants to sell their home. And why would they? In many cases, they locked in an
00:09:46.080extremely low interest rate during the pandemic. And as we've already discussed, they can expect a
00:09:50.820very large return on their investment in the coming decades. But even after several decades,
00:09:56.280they won't want to sell because their children will need to live somewhere. If they will even
00:10:01.740pass their house down to their children, which we'll get to in a second. If the median home is
00:10:06.060going for a million dollars, then many more homes are theoretically going to remain in the family.
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00:21:07.560whatever you do, don't take your $200,000 watch, you know, that we all have, and your $150,000
00:21:13.760Louis Vuitton duffel bag. And just to be safe, leave your $2 million earrings at home as well.
00:21:20.740I mean, you got to have some street smarts if you're going to survive in London.
00:21:25.320Now, of course, when he's spending time in his $27 million mansion in London or driving through
00:21:29.940the city in an armored SUV or walking around with armed bodyguards, Ed Sheeran probably isn't taking
00:21:34.820his own advice because he doesn't have to. But for everybody else, for people who can't spend
00:21:40.620millions of dollars on a home, the message is that you're responsible if you get robbed,
00:21:45.080assaulted, and murdered. It's not the fault of the criminal. Because by the way, most people
00:21:50.640getting robbed in London don't have a $200,000 watch. They have like a $50 watch and they're
00:21:57.820getting that stolen and possibly stabbed in the process. But you can't blame the criminals.
00:22:02.980No, they didn't do anything wrong. You're the one who should suffer because you made yourself a target by existing, by having the gall to walk down the street. You have two options. Get robbed and shot, or I guess stabbed, this is London, or do what everyone else is doing and move far away to a coastal enclave or a pocket of the south of the Mountain West.
00:22:29.100And naturally, if you do what everyone else is doing, then you're going to pay a lot more also.
00:22:34.920And meanwhile, in Chicago, at least 36 people were shot, six fatally, in shootings over the weekend.
00:22:42.680So that's how Chicago rang in Juneteenth and Father's Day.
00:22:47.320Here's a news report from one of the first shootings, and we'll play most of it.
00:22:52.720Tell me if you notice anything here. Watch.
00:22:55.080We begin with breaking news of a mass shooting on Chicago's south side.
00:26:49.800Tonight around 7 o'clock during the Juneteenth event,
00:26:53.940the main concert was getting ready to start, and several flights broke out.
00:26:57.680Our officers immediately responded to a number of locations within the park,
00:27:02.000but the disruption kind of took on a life of its own,
00:27:05.860and out of an abundance of caution, we made the decision to evacuate the park.
00:27:09.720Out of an abundance of caution, we made the decision to evacuate the park.
00:27:15.980Translation, it wasn't one or two people fighting each other.
00:27:19.360It was hundreds of black people, mostly teenagers, young black males, engaging in an all-out riot for no discernible reason,
00:27:28.200which is something we're all now seeing happen all over the country multiple times a week.0.61
00:27:31.940It's not isolated. It's not a one-off. It's the default state of affairs.
00:27:35.840At this point, if thousands of black teens aren't fighting in the street, that's an abnormal situation that merits investigation.0.99
00:27:46.540For good measure, this was the scene in Baltimore over the weekend.
00:27:50.440AFRAM, which is apparently one of the biggest African-American festivals on the East Coast, was marking its 50th anniversary as part of the Juneteenth celebrations.
00:28:00.120And here's what that family-friendly event looked like.
00:28:05.840the black lotus your plaques are bogus so i stripped them off the wall waiting for my0.89
00:28:10.140cue to corner pocket eight balls you racking them up on big paper like pancakes stacking0.90
00:28:14.820them up in fact i'm slapping them up cadillac is a truck i can't lose with 22s that's what
00:28:19.980i wonder why nobody wants to live in these uh in those these places why the houses remain vacant
00:28:28.920two days later appropriately enough it was father's day and um we all know that none of
00:28:34.360the teens in these videos had a father in the household to celebrate with. I think we can
00:28:41.140guess that very few of them were, you know, sitting around the living room on Father's Day
00:28:46.460morning while their dad opened a gift bag with some socks inside. I think that scene probably
00:28:53.260did not play out very often in Baltimore. And a lot of them are probably already parents themselves,
00:28:58.240if we're being honest. It's not simply a matter of law and order to bring an end to displays like
00:29:02.780this, although that's obviously a very important part of it. It's also about restoring sanity
00:29:06.820to the housing market. Nobody wants to live within 50 miles of this kind of chaos. All of
00:29:14.740the homes are therefore useless, and as a result, the homes that are in safe areas become simply
00:29:20.120too expensive. The moment we haul all these criminals to prison and never let them out,
00:29:26.720we'll see a drastic reduction in housing prices in the entire country. Of course,
00:29:30.980That's not to say the problem is limited exclusively to black teens and their absent fathers.
00:29:36.560The second big issue with housing that some of the most desirable areas of the country have been made undesirable because of post-civil rights movement realities is compounding the first issue, that millions of people want to live in the same small number of places.
00:29:52.480But there's a third factor in all this, which is commonly overlooked, which is that illegal immigration is driving demand for new homes.
00:30:02.040So if it's true that 20 million illegal immigrants or more lived here during the Biden administration, then they had to live somewhere.
00:30:09.020And in fact, James Carter, a former deputy assistant treasury secretary, wrote an op-ed a couple of days ago where he spelled out the extent to which illegal aliens have caused housing prices to increase very considerably over just the past few years.
00:30:24.000For much of the 2010s, pay in lower-skill occupations lagged behind while professional salaries pulled away.
00:30:31.240As immigration enforcement has increased, that gap has narrowed.
00:30:34.340Take construction, which relies heavily on immigrant labor.
00:30:37.260Wages in the sector grew at roughly 2.5% annually between 2010 and 2017.
00:30:42.140Now BLS data shows construction wages is growing at 3.1% through the first quarter of 2026,
00:30:47.000above the sector's pre-enforcement baseline, even as broader private sector wage growth cooled to 3.4%.
00:30:54.340A recent Federal Reserve working paper finds that unauthorized immigration accounted for roughly 30% of house price growth
00:31:02.000and 20% of rent growth in the average metro area between 2021 and 2024.1.00
00:31:10.280So I'll say that last part again because it bears repeating.
00:31:13.960Illegal aliens caused 30% of the increase in housing prices that we've seen in recent years.
00:31:21.140So at the same time that illegal aliens were competing for American jobs, they were causing a massive spike in housing costs across the board.
00:31:29.120Now, I had to double check the statistic because even with the knowledge that Joe Biden's administration imported tens of millions of illegal aliens and broke the country, it still seems really shockingly high.
00:31:41.920And indeed, this is from a recent paper published by the Federal Reserve Bank of Dallas.
00:31:47.640Quote, we find that during the boom period, an increase in unauthorized immigrant worker flow
00:31:52.040equals to equal to 1% of a local area's initial employment increased local housing prices by 2.2%
00:32:00.200and increased local rents by 1.4%. The impact on rents is slightly smaller for single family units
00:32:07.560and slightly larger for multifamily units,
00:32:35.720the degree to which foreigners have reshaped this country and all of the West is truly staggering1.00
00:32:41.800to comprehend. Take a moment now to look at all three factors leading to the rise in housing1.00
00:32:48.980costs that we've addressed. First, that people only want to live in a few places. Second,
00:32:55.480urban crime makes many prime locations unlivable. Third, immigration has the dual issue of causing1.00
00:33:03.180more pressure on our strapped housing market while also reducing the number of desirable areas to0.98
00:33:08.360live. Now, what you have between these three factors is a perfect storm, basically, but they're
00:33:16.540not all. A fourth reason for skyrocketing housing costs is terrible public policy, which obviously
00:33:24.460dovetails with the other three we've talked about. Government regulations and codes are making it
00:33:28.780more expensive to build new housing supply, particularly in places like coastal California,
00:33:34.000places that have developed huge amounts of housing in the past decade, like Austin, Texas,
00:33:38.780have seen rent stabilize or even decline. Anti-growth places like Boston and San Francisco,
00:33:44.800where it's basically impossible to build anything, have seen prices skyrocket.
00:33:50.220The U.S. population in 1990 was about 250 million people. Today, it's about 350 million people. It's
00:33:55.780a 40% increase. In 1990, San Francisco had 328,000 housing units. Today, it has only
00:34:02.800415,000, which is a 25% increase. The rise of NIMBYs in places like San Francisco and
00:34:10.680the counties around it are making it impossible to deal with the demand surge from a constantly
00:34:15.020growing population. At this point, you're probably thinking, what about places where
00:34:21.020you can build, places where there isn't urban crime and places without a lot of immigration?
00:34:25.780You know, why are places like northern Michigan or Stowe, Vermont or coastal Maine also getting so expensive?
00:34:34.580Well, this is related to the previous points. People want to live in places that resemble 1950s America.
00:34:40.380You know, go to Vermont or coastal Maine or northern Michigan and you can find that.
00:34:45.240And there's a huge trend to people fleeing diversity, the wonders of diversity to those areas.
00:34:50.900but there's also a fifth and very important overlooked reason for rising homeownership costs,
00:34:57.020and that is inflation. The government has doubled the amount of money that was in circulation during
00:35:01.620COVID, meaning the value of the dollar is declining, which in turn inflates the dollar
00:35:05.900cost of homes. This is one of the consequences of being $40 trillion in debt. Our leaders will
00:35:11.620seek to inflate away the currency as a roundabout way of reducing the country's financial obligations.
00:35:17.560Inflation is a hidden tax that's behind so many of the price increases we've detailed at the beginning of the episode.
00:35:23.640A dollar in decline means home prices rising, even if the inherent value isn't rising with it.
00:35:28.460It makes repair and replacement costs higher, which drives increases in insurance costs.
00:35:34.260It also makes it more expensive to provide city services, which makes your tax dollars go up.
00:35:39.280a lot of the rise in housing prices is really just a decline in the dollar, which is why it's
00:35:44.380a bigger and bigger issue that young people can't afford homes. One of the best defenses0.97
00:35:50.040against inflation is long-term debt backed up by an asset that rises with inflation.
00:35:56.080And these five explanations for rising housing costs go a long way in explaining why we're in
00:36:01.840this situation that we're in. And unless they change, predictions that the average house will
00:36:07.200be a million dollars by 2050 are likely underestimating the situation, probably by a lot.
00:36:13.720Now, the problem is that solving these problems is not politically practical, and for that,0.99
00:36:20.160we can thank the most selfish generation in American history, which is the baby boomers.0.97
00:36:25.300Now, boomers today control over 40% of the national real estate wealth, and about a quarter0.99
00:36:30.700of them own a second home or a vacation property. One Northwestern Mutual survey found that less
00:36:37.040than a quarter planned to leave an inheritance to future generations. A Charles Schwab survey of
00:36:42.160high net worth Americans found that for nearly half of baby boomers, their priority, their top
00:36:47.720priority is to, quote, enjoy my money for myself while I'm still alive. Now, it's impossible to
00:36:55.320overstate just how historically bizarre, not to mention evil, that attitude is. Because for all
00:37:02.180of human history, the thing that animated older generations was a desire to pass down a legacy
00:37:07.740to their children and their grandchildren. And that's still the norm, by the way, outside of
00:37:13.060boomers. The same survey, interestingly enough, found that wealthy millennials were less likely
00:37:19.380to list enjoying my money for myself as their priority. They had a greater desire to see their
00:37:25.240own kids inherit their wealth. They wanted to see it. They wanted to be there to see their kids
00:37:30.080benefit from the wealth and legacy. So the boomers are, in this way, kind of an aberration.0.98
00:37:38.440Their general disinterest, which of course this does not apply to all of them, but0.91
00:37:42.340the general statistical disinterest in passing wealth and legacy to their children is unique.
00:37:50.340And it's therefore helping to cause unique problems that their children and grandchildren
00:37:54.800have to deal with. Now, it's not useful or helpful to sit around stewing in resentment
00:38:00.720against other generations. There's no real benefit in that, because even if it's true that
00:38:06.120you're getting kind of screwed by previous generations, okay, well, once that's been
00:38:10.960established, you got to go live your life. But the fact is, economically, the boomers did have0.85
00:38:17.740it considerably easier than their children have it. When they started entering the housing market
00:38:22.200in the late 1960s, the dollar was still pegged to the gold standard. The immigration laws that
00:38:27.520transformed the country had only just passed and so had not yet transformed the country.0.84
00:38:33.200The cities were mostly still livable, but in steep, swift decline because of laws supported1.00
00:38:38.380by boomers. And it was easy to build new housing in suburbs, which were hardly regulated. Boomer0.99
00:38:44.520NIMBYs hadn't made it impossible to build in coastal California yet. Owning a home was the0.99
00:38:51.280American dream, and it was an attainable one. Now that they've secured their dominant position in
00:38:55.920the American real estate market, boomers generally have done everything possible to make sure housing0.97
00:39:00.300stays unaffordable. Doing anything that might reduce the value of their housing is politically0.76
00:39:06.380untenable, something Donald Trump has said out loud. Watch. Existing housing, people that own
00:39:13.880their homes, we're going to keep them wealthy. We're going to keep those prices up.
00:39:21.280So if you're a young person who wants a home, just know that there's a reason it's so bad out there.
00:39:26.640It's because the number of desirable places is rapidly declining.
00:39:31.140Lots of primary real estate is taken up by the worst and most violent people in the country.
00:39:35.340The government is deliberately destroying the value of the dollar while also importing millions of people and making it impossible to build anything new.