Only a few months ago the average new home build cost an extra $24,000 due to the price increase of lumber alone. Fast-forward to today and now that increase is $36,000! That is an increase of 50 percent in only a few short months. And of course we are told constantly by our policymakers that there is no inflation. Do not believe your lying eyes is supposedly their message. Further, this is placing upward pressure on rents as well, and according to the National Association of Home Builders (NAHB), monthly rent payments are likely to increase by $120 per month. So understand that Uncle Sam and company have been sending out stimulus checks over the last year. If your rent should increase by $120 per month, then that check simply went to covering this rent increase. However, it will not be able to cover all of the other price hikes that exist from A-Z.
As we continue to see upward pressure on prices, many major corporations have been issuing press releases to their customers indicating that they will be increasing their prices, if they have not done so already. It would also be prudent to not only pay attention to the price hikes, but also the volume of product. Is it the same weight or lesser? Is it the same count or fewer? With these prices increasing there are only a few things that can happen. For example, corporations can assume the price hikes, thus squeezing their margins; they can pass along the entire cost to their customers, thus increasing consumer prices yet also risk losing market share; or a combination of the two. However, whichever option is chosen by what company, one thing is certain and that is margins and savings will be squeezed. The markets are priced to perfection, as the saying goes and thus anything that strays from this narrative can have some serious negative consequences.
Some such negativity right now with the current state of housing is the likelihood of pricing out a generation of homebuyers. The demographic most negatively impacted right now is the Millennial generation. This cohort has to contend with purchasing record-high housing prices, equity prices, car prices, rents, student debt payments, and the lack of current and future opportunities. All while likely to be left with the responsibility of cleaning up this mess from a budgetary and governmental standpoint. This is the intersection of economics, politics, and social issues. The dam is about to burst globally because of these issues, and when it does, it will be epic! Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Housing #Lumber #Jobs #EndTheFed #bananarepublic #FireCongress #Liberty #USA #Leadership #Inflation #Gold #Silver #Commodities