If people are paying more than 25% of their income for housing then they have no disposable income to stimulate economic growth. Even though home prices have fallen the cost is still beyond the reach of most and if they are in housing, they are paying too much.... most spend over 50% of their income for a place to live.
Hence the homeless population continues to grow and become a subculture of the U.S. Housing prices still need to fall more to become affordable for all. Housing is not an investment, it's a necessity. Now add food and medical costs and you have an economy that will never be healthy again.
http://lillianabel.blogspot.com/ (Necessities are Luxuries)
Thursday, June 16, 2011
Sunday, June 05, 2011
The economy will never improve until any kind of housing is more affordable for all. There is no disposable income among the majority of the people as they spend 50 to 70% if their income for housing even though housing has dropped to 2002 levels in most areas, it is still too high. So goods can't be bought, causing job loses. Only the top 1% have disposable income. They have been expected to create jobs and they have not created that many jobs. Trickle Down has not worked.