Some things haven’t changed

Summary

Marketplace: "Some Things Haven’t Changed"
Release Date: February 11, 2025
Host: Kai Ryssdal

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1. Tariffs on Steel and Aluminum: Unpacking the Economic Impact

[00:52]
Kai Ryssdal opens the episode with a discussion on the intertwined relationship between steel and aluminum industries in the United States. Since the Trump administration's initial tariffs in 2018, domestic steel production has surged, reducing the import share to approximately 32%. Mitchell Hartman from Marketplace highlights, “US steelmakers will likely benefit from tariffs on foreign competitors” [02:16].

Jennifer McEwen from Capital Economics observes that the U.S. steel sector still has significant spare capacity, suggesting potential for further production increases [02:23]. However, rising steel prices are causing concern across various industries, particularly construction. Brian Termail of the Associated General Contractors of America points out, “steel is built into what contractors charge for projects in home building” [02:34]. This increase affects costs for everyday items like washers, dryers, and stoves in multifamily units [02:46].

In contrast, the aluminum industry faces different challenges. Only about half of the aluminum used domestically is produced in the U.S., with Canada being the primary source of imports. Richard Abulafia from Aerodynamic Advisory explains, “Aluminum is used in electrical components, appliances, and aircraft” [03:09]. Gary Hofbauer from the Peterson Institute for International Economics notes the high production costs and the current electricity shortages exacerbated by the AI boom, making it difficult for U.S. aluminum producers to compete even with a 25% tariff on imports [03:30].

2. Consumer Inflation Expectations: Stability Amid Uncertainty

[04:48]
Marketplace’s Elizabeth Troval delves into a January survey from the Federal Reserve Bank of New York, revealing that consumers largely believe inflation remains stagnant, neither improving nor worsening [04:58]. Zach Bethune from Rice University summarizes, “Consumers are dug in” with inflation expectations stabilizing around 3%—slightly above the Fed’s 2% target [05:00].

Luke Pardue of the Aspen Economic Strategy Group discusses anticipated rises in commodity prices, particularly in housing and energy, which remain underlying concerns for consumers [05:16]. Kristen Schwab adds, “A lot of these commodity prices are forecast to rise […] That’s an underlying concern in the report” [05:26]. Despite a slightly loosening labor market, Denny Cohenemci from Morning Consult notes a growing pessimism among consumers regarding the economic outlook [05:30].

3. Food and Beverage Industry Earnings: Insights into Consumer Spending

[06:19]
Kristen Schwab analyzes upcoming earnings reports from major food and beverage companies such as McDonald's, Kraft, Heinz, Coca-Cola, and Nestlé, emphasizing their significance in understanding consumer trends. Eric Gonzalez from KeyBank highlights McDonald’s impressive 30% same-store sales growth despite disappointing quarterly revenues [06:43]. He explains, “Consumers aren't only thinking about prices, they're focused on what those prices get them, like sit-down service or bottomless chips” [07:13].

Robert Byrne from Tech Nomic observes that consumers maintain their spending levels by reducing the number of dining occasions rather than the total expenditure [07:31]. David Porter Latin from Circana provides data indicating that the average American allocates 60% of their food budget to home consumption and 40% to eating out [07:39]. This stability suggests that while consumers adjust how they spend, their overall food budgets remain consistent [08:01].

4. Data Centers in Central Ohio: Power Demands and Community Impact

[08:37]
Kai Ryssdal transitions to the growing presence of data centers operated by tech giants like Amazon, Meta, and Google. Maya Frazier from Switchyard Magazine discusses the surge in data center development in New Albany, Ohio, focusing on their immense electricity requirements [09:05]. These facilities are described as “monstrosities” due to their size and the extensive electrical infrastructure needed [09:13].

Frazier explains the local conflict over new transmission lines necessary to power these data centers, which have significantly raised farmland prices and displaced long-time farming families. “We've seen a massive increase in the price of farmland, making farming unsustainable for families who have farmed for generations” [12:15]. The lack of public benefits from these developments has left communities feeling powerless [12:36].

As demand for data centers and electricity continues to grow, concerns mount about the future impact on local communities. Frazier highlights the minimal public investment and the privatized nature of economic development through JobsOhio, exacerbating local frustrations [13:24].

5. Car Safety Inspections: A State-by-State Patchwork

[16:55]
Marketplace's Henry Abbott explores the varying state requirements for annual vehicle safety inspections. States like Texas, Utah, New Jersey, and Florida have eliminated routine safety checks, leaving 15 states and the District of Columbia to maintain them [17:26].

At Garlington Garage in South Burlington, Vermont, technician Max Burlow details the inspection process, emphasizing checks for rust, lights, and brake integrity [17:48]. Demini Pollitt, owner of Garlington Garage, acknowledges that while inspections are good for business, consumers like Thomas Dunbar feel vulnerable to potential exploitation [18:52].

The episode discusses the unintended consequences of Texas abolishing safety inspections, such as the closure of inspection stations and concerns over road safety [19:55]. Subhashish Dasch from Texas State University mentions the lack of evidence linking inspections to improved safety, calling for more research [20:32]. David Bennett from AAA advises regular vehicle maintenance regardless of state requirements to prevent breakdowns [20:37].

6. Rising Costs of Homeownership: Property Taxes and Insurance

[22:04]
Samantha Fields reports on increasing property taxes and homeowners insurance, which are now consuming nearly one-third of homeowners' monthly payments—a decade-high [23:08]. Tim Anderson from Intercontinental Exchange attributes rising insurance costs primarily to climate change-induced extreme weather events, which have led to higher premiums and reduced competition among insurers [23:32].

Amy Bach from United Policyholders points out that advanced insurer technologies, such as drone inspections and AI-driven risk assessments, are contributing to premium hikes and non-renewals [24:04]. Jenny Schutz from Arnold Ventures notes that new homeowners are particularly affected by these increases since existing homeowners often benefit from capped tax rates and lower insurance costs [24:35].

High property taxes and insurance costs, combined with already inflated home prices and mortgage rates, are making homeownership unaffordable for many. Kurt Olabak shares his personal experience of doubling his insurance costs, leading his family to consider moving to more affordable areas [25:22]. Kristen Schwab highlights the rise in mortgage delinquencies among lower-income homeowners struggling with these escalating costs [25:34].

7. Elon Musk’s Unsolicited Offer to Buy OpenAI: Potential Implications

[26:59]
In a brief closing segment, Kai Ryssdal touches on a high-profile financial move where Elon Musk and a group of investors have made an unsolicited $97.4 billion offer to acquire OpenAI, the creators of ChatGPT [26:59]. Given the strained relationship between Musk and OpenAI CEO Sam Altman, the outcome of this offer remains uncertain, potentially leading to significant changes in the AI landscape [27:05].

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Notable Quotes

• Mitchell Hartman: “US steelmakers will likely benefit from tariffs on foreign competitors.” [02:16]

• Brian Termail: “Steel is built into what contractors charge for projects in home building.” [02:34]

• Eric Gonzalez: “Consumers aren't only thinking about prices, they're focused on what those prices get them, like sit-down service or bottomless chips.” [07:13]

• Kristen Schwab: “A lot of these commodity prices are forecast to rise […] That’s an underlying concern in the report.” [05:26]

• Maya Frazier: “We've seen a massive increase in the price of farmland, making farming unsustainable for families who have farmed for generations.” [12:15]

• Henry Abbott: “This process is not exactly popular with drivers like Thomas Dunbar.” [18:15]

• Samantha Fields: “Combined [property taxes and insurance] they've jumped almost $3,000.” [22:38]

Conclusion

In this episode, Marketplace host Kai Ryssdal and his team explore enduring economic and social issues, from the complexities of metal tariffs and their impact on industries to the rising costs of homeownership and the shifting landscape of automotive safety regulations. The discussions provide a comprehensive look at how these factors influence both businesses and everyday consumers, offering valuable insights into the persistent challenges within the U.S. economy.

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For more insights and detailed reports, visit marketplace.org.

Transcript

[Marketplace Host]

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[Kai Rysdal]

On the program today A Tale of Two Metals what we are eating and what we are drinking and cars and the regulation thereof. From American Public Media, this is Marketplace in Los Angeles. I'm Colin Rysdal. It is Monday today. This one is the 10th of February. Good as always. Good. Have you along everybody. So steel and aluminum, aluminum and steel. At this point they just kind of go together, right? The two critical industrial metals have been joined at the proverbial hip since 2018 in the first round of Trump tariffs. With a second round on the way, it's worth a note that the two metals, the industries that produce them and the markets they serve are actually quite different. Marketplace's Mitchell Hartman gets us going today.

[Mitchell Hartman]

Let's start with steel. The US Produces most of what it uses. After Trump imposed tariffs during his first administration, domestic production rose, says Jennifer McEwen at Capital Economics.

[Marketplace Host]

The import share of steel in the US has been falling since 2018. It's now around 32%. So around a third.

[Mitchell Hartman]

US steelmakers will likely benefit from tariffs on foreign competitors. And, says McEwen, there's quite a lot.

[Marketplace Host]

Of spare capacity in the US steel sector, which means that there is scope for production to pick up again.

[Mitchell Hartman]

Rising steel prices will affect a lot of industries, starting with construction.

[Kai Rysdal]

There are a lot of worries among contractors.

[Mitchell Hartman]

Brian Termail at Associated General Contractors of America says steel is built into what contractors charge for projects in home building.

[Kai Rysdal]

You know, a multifamily unit, you might be costing out 50 sets of washers and dryers, 50 stoves, 50 dishwashers.

[Mitchell Hartman]

Aluminum is a whole different metal. We only produce about half of what we use domestically. The vast majority of what we import comes from Canada. It's used in electrical components, appliances and aircraft, says Richard Abulafia at aerodynamic advisory.

[Marketplace Host]

Boeing's biggest product, the 737.

[Kai Rysdal]

The structure is 90% aluminum.

[Mitchell Hartman]

Aluminum is not cheap to make, says Gary Hofbauer at the Peterson Institute for International Economics.

[Kai Rysdal]

It requires a lot of power, which turns bauxite into the metal. Well, there's a shortage of electricity now in the US with the AI boom.

[Mitchell Hartman]

So he says it's unlikely domestic aluminum makers will be able to increase their output and compete with foreign producers, even with a 25% tariff on imports. I'm Mitchell Hartman for Marketplace.

[Kai Rysdal]

Traders on Wall street today looked around, saw the chaos and said, yeah, we're okay with that. We'll have the details when we do the numbers. Business owners and analysts and economists are all trying to make sense of the changes in American economic policy. You have heard some of those people on this program. Consumers, though, are trying to digest the changing policy landscape in very personal terms. Their jobs, their wages, and how much things are going to cost. We got a sense of how they are feeling today with January's survey of consumer expectations out from the Federal Reserve bank of New York. Marketplace's Elizabeth Troval has that story.

[Marketplace Host]

In January, consumers really held onto their belief that inflation isn't getting any better or any worse. Rice University's Zach Bethune.

[Henry Abbott]

Consumers are dug in.

[Kai Rysdal]

So, you know, inflation expectations are now kind of, you know, maintaining around 3%. That's a percent higher than the Fed's target of 2%.

[Marketplace Host]

And consumers are expecting commodity prices to increase. Luke Pardue is with the Aspen Economic Strategy Group.

[Kristen Schwab]

A lot of these commodity prices are forecast to rise, like housing and energy prices. And so that's one thing that I think is a bit of a underlying.

[Marketplace Host]

Concern in the report in terms of what consumers expect from the labor market.

[Kristen Schwab]

Pardue says they're comfortable in the positions that they have. This sort of tight labor market has loosened a little bit, though.

[Marketplace Host]

Everything is still very wait and see for consumers like Denny Cohenemci. I feel confused. She's also an economist with Morning Consult. It takes time, I think, for consumers to really digest the news, especially when it comes to inflation, though there are some early indications that for some consumers we do see that downward momentum. She says her recent data shows when consumers think about the future, it's starting to sour their mood about the economy. I'm Elizabeth Troval for Marketplace, continuing with consumer ish news.

[Kai Rysdal]

This is a big week on the earnings calendar. Food and beverage, in particular McDonald's, Kraft, Heinz, Coca Cola, Nestle, and a whole bunch more are going to be reporting results. And since food is such a big part of both our essential and our discretionary spending habits, what these companies have to say is going to tell us a lot about consumer trends. Marketplace's Kristen Schwab looks at how we are spending our food budgets these days.

[Marketplace Host]

Formally speaking, Eric Gonzalez is a restaurant analyst at KeyBank. Less formally, he is a regular at his local Chili's. You know, because my kids love it and, and I can get in and out of there for less than 40 bucks with my three little girls. Chili's. Yes, that Chili's has made an unexpected comeback. In its most recent quarter, the chain reported same store sales growth of over 30%. Gonzalez says it shows consumers aren't only thinking about prices, they're focused on what those prices get them, like sit down service or bottomless chips.

[Kristen Schwab]

And I think consumers will pay a.

[Marketplace Host]

Dollar more if you're meeting some other consumer need, he says. In the last couple years, fast food got too aggressive with its pricing, so people turned to fast casual and full service restaurants. But consumers are comprom, says Robert Byrne, who leads consumer research at Tech Nomic.

[Kai Rysdal]

Consumers are still spending as many dollars as they always have at restaurants. It just translates into fewer actual occasions.

[Marketplace Host]

It means overall food budgets have stayed consistent. The average American puts about 60% of theirs toward food at home and 40% toward eating out, according to David Porter Latin, a food industry advisor at Circana. He says consumers daily eating habits can be fickle.

[Kai Rysdal]

You know what's going on with pricing and what happened with the weather.

[Mitchell Hartman]

But mostly our share of consumption has.

[Samantha Fields]

Really been very, very stable.

[Marketplace Host]

Breakfast, lunch and dinner are a given. It's just up to grocers and restaurants to duke it out and see who wins each meal. I'm Kristen Schwab for Marketplace.

[Kai Rysdal]

The huge data centers used by the big tech giants Amazon and Meta and Google and all the rest, they are a growing part of the modern economy. But where they get built can literally change the landscape, especially when you factor in how much electricity those places need. That gets me to a story I saw the other day in Switchyard magazine about the power demands of data centers in central Ohio. Maya Frazier wrote it. Maya, thanks for coming on the program.

[Maya Frazier]

Great to be here.

[Kai Rysdal]

Shy Would you tell me what these data centers in central Ohio look like.

[Maya Frazier]

In the plainest terms? They're just buildings, but they're kind of monstrosities in a lot of ways. Where I live in central Ohio, there has been just a massive boom in data center development in a town called New Albany, which is north of Columbus.

[Kai Rysdal]

For those unfamiliar. What's inside these places? Because that's the nub of this story.

[Maya Frazier]

Data centers require an immense amount of electricity to run. And so much of what sort of comprises these buildings is wires and network connections and electrical equipment.

[Kai Rysdal]

And that gets us to why we're talking to you and what really is going on in central Ohio, which is the electricity demands of these places. Virtually everything inside it demands requires electricity. And the power companies are stringing them across the central Ohio landscape, as you say.

[Maya Frazier]

Yes, and more is coming. There's a bit of a battle over some new transmission lines about 13 miles long, two different lines that are going to be running from a city a little bit. Well, it used to be a small farm town north of New Albany, all the way to just on the outskirts of sort of the residential areas of New Alban. Not like the lines you see behind your house or the lines you might see in your neighborhood. I mean, the trunk of these things are as big as like a sequoia. They're just massive.

[Kai Rysdal]

I think this is the beginning of the piece, actually. You stood there for a while and you listened, right?

[Maya Frazier]

I did. I had sort of heard rumors that these things crackle. And I had been doing some reporting among some farmers that are sort of right in the bullseye of where these things are going to run through and talk to a lot of residents who live around these of just what is it like? And it's quite eerie. I mean, I stood under them and you just. You feel this crackle and this slight hum. It's a very unnerving feeling to be underneath these.

[Kai Rysdal]

Tell me about the farmers and the towns that live under these wires that you spend some time with.

[Maya Frazier]

The area between has always been a very rural area. A lot of the farmers have been sort of feeling powerless to this development that's happened. And not only has it had an influence on the cost of farmland, but it's also influenced people who make moved to this area because they were trying to escape this sort of sprawling development that's happening both with Columbus and around New Albany, where a lot of the big tech development has unfolded.

[Kai Rysdal]

It seems likely, given the way society is going, that demand for these data centers and thus demand for electricity is only going to grow. What then happens to the communities underneath the power lines and around the data centers as that growth happens?

[Maya Frazier]

Well, we've seen a massive increase in the price of farmland, which has made farming unsustainable for families who have farmed for generations around this area. We've also seen very little public benefit to the development of these data centers in the area. The deals that have been made have all been negotiated by Jobs. Ohio, which is a private is the privatized arm of economic development in Ohio. And I think that's left a lot of local people feeling like they are powerless before this massive expansion of big tech infrastructure in middle America.

[Kai Rysdal]

Maya Frazier writing about central Ohio big tech and electricity. Maya, thanks a lot. Appreciate your time.

[Maya Frazier]

Thanks guy.

[Kristen Schwab]

Coming up, nearly one third of their monthly payment is going directly to property insurance and property taxes.

[Kai Rysdal]

The actual costs of being a homeowner right now. But first. Sure, why not. Let's do the numbers. Dow Industrials up 167 today, about 4. 10%. Closed at 44,470. Did the blue chips. The NASDAQ gained 190 points. That's 1%. 19,714. The S&P 500 added 40 points, about 7. 10%. 6,066. Kristen Schwabisch just telling us about consumers. Consumer spending on food at home versus in restaurants. So here you go. McDonald's beefed up 4.8%. That's despite posting disappointing quarterly revenue today. Wendy's slid 6. 10%. Coca Cola fizzed up 1 and 1 10. 1% today. Brinker International, parent company of Chili's in Maggiano's, Italy, shrank 2 and 4. 10% today. Here's the ticker symbol of the day E A T for Brinker International. Shares of on Semiconductor dipped 8.2% after posting ho hum fourth quarter earnings. The global chipmaker reported a decline in sales and said the 2025 outlook quote remains uncertain. That can't be good. Bond prices fell. Yield on the 10 year T note went up 4.50%. You're listening to Marketplace. Hey everybody, it's Kai. We've got an exciting offer for you now through Valentine's Day. You can show off your love for Marketplace by grabbing an investor T shirt when you donate $5 a month. Invest in the nonprofit journalism you love and get a shirt to show off your support. Give now at marketplace.org donate.

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[Kai Rysdal]

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[Marketplace Host]

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[Kai Rysdal]

I'm Kai Rysdal. Texas has gotten rid of its requirement that cars pass an annual safety inspection. Utah, New Jersey and Florida have already done away with their routine safety checks. 29 states do still require annual emissions tests, but just 15 of the states in the Union and the District of Columbia oblige drivers to get a regular once over to make sure their car is in decent shape. Marketplace's Henriett looks at what that patchwork of rules means for drivers and for for the businesses in the auto repair industry.

[Henry Abbott]

Technician Max Burlow has a 2006 Subaru Forester up on his lift at Gurlington Garage, a repair shop in South Burlington, Vermont. In this state's snowy climate, road salt does a good number on most cars and trucks every winter. So a big part of a required annual inspection is looking at rust.

[Kristen Schwab]

Basically, if you can put your finger through it, that's bad.

[Henry Abbott]

The rust on this Forester hasn't gotten to that point. But to check, Berlo taps around on the underside of the car with a screwdriver.

[Kristen Schwab]

Yeah, so it's like flaky. You know there's some flakes coming off, but doesn't like totally destroyed.

[Henry Abbott]

Like the integrity of it. Good enough. Berlo also checks the lights and the windshield wipers and removes a wheel to check rust buildup on the brake. After about an hour, he determines it gets to pass and puts a sticker in the corner of the windshield. Good for another year. Total cost about 84 bucks.

[Marketplace Host]

We catch things before they fail so you don't have breakdowns.

[Henry Abbott]

Demini Pollitt is the owner of Garlington Garage. She acknowledges inspections are decent business. She says her shop does 30 to 40amonth, and a lot of times if something needs to get fixed, customers will get the work done there.

[Maya Frazier]

But we are always really clear with people if we fail you for something, you do not have to get it fixed with us.

[Marketplace Host]

You can bring it anywhere you want.

[Henry Abbott]

This process is not exactly popular with drivers like Thomas Dunbar, a high school teacher in Cabot, Vermont. He remembers one failed inspection several years ago. It was a leased Toyota Yaris, and I took it for an inspection and they told me that my brake pads were too thin. So he went back to the dealership, which said his brakes were fine, then to a different mechanic who passed him, he says. But he had to pay for both inspections, the pass and the fail. It just feels like it's easy to be taken advantage of. That was essentially the argument of state lawmakers in Texas who passed a law that did away with that state's safety inspection requirement. The law might save Texas drivers a little time, but it upended Carissa Barnes decades old family business, a chain of inspection stations in the San Antonio area.

[Marketplace Host]

They look like a Texas flag.

[Henry Abbott]

It is a metal building painted like a Texas flag, just a single bay that drivers could pull into and get their inspections done really fast. We created an entire procedure and process.

[Marketplace Host]

On how to inspect it, and we.

[Henry Abbott]

Can get you out in nine minutes. At its peak, the company had 10 locations. Now they're all closed. Barnes has shifted her attention to another business focused on vehicle registrations, but she thinks eliminating inspections was a mistake. What I'm very concerned about is that because we no longer have an annual safety inspection, cars are just going to be unsafe. The roads will be less safe. But whether requiring an annual inspection actually reduces the number of crashes is not totally clear. Subhashish Dasch, an associate professor at Texas State University, studied whether inspections improve safety in 2019.

[Kai Rysdal]

We did not find any evidence that.

[Maya Frazier]

Steps with inspection improved safety.

[Henry Abbott]

But he says his study only looked at data on fatal crashes. So he says the subject needs more research. Whether or not your state requires you to get your car checked out by a professional, it's never a bad idea, says David Bennett, a senior manager at aaa. But he says a lot of drivers tend to put off regular maintenance, replacing burnt out headlights or worn out tires, for example. When you start avoiding some of those things, something's gonna break down more than likely, and then that cost is going.

[Kai Rysdal]

To be more than if you just maintained it overall.

[Henry Abbott]

As for taking advantage of inspection customers, Demini Pollitt in Vermont says at her shop, at least it doesn't happen.

[Maya Frazier]

Cars, especially in Vermont, have lots of problems. We do not have to make up problems in order to do business and be successful.

[Henry Abbott]

There are some bad apples out there, but when your mechanic tells you your car won't pass inspection, she says, they're usually not trying to rip you off. I'm Henry Abbott for MarketPL.

[Kai Rysdal]

Home prices in this economy are high. We've talked about that a lot. Also high, but a good deal less talked about homeowners insurance and depending on where you live, property taxes combined, according to new data from intercontinental Exchange, which owns, among other things, the New York Stock Exchange. They say taxes and insurance are becoming ever larger chunks of people's monthly payments. Marketplace's Samantha Fields report.

[Samantha Fields]

Tim Anderson and his wife bought their house in Austin, Texas in late 2019. Then the pandemic hit and home prices started rising fast.

[Kristen Schwab]

And our property taxes and home insurance.

[Samantha Fields]

Has really changed, especially in the last year. Combined they've jumped almost $3,000.

[Maya Frazier]

And that kind of gave me pause and I said, oh well, this is something to kind of pay attention to.

[Samantha Fields]

Lots of people are having similar experiences all across the country. Andy Walden, head of mortgage and housing research at intercontinental Exchange, says for the average single family homeowner now, nearly one.

[Kristen Schwab]

Third of their monthly payment is going directly to property insurance and property taxes, which is the highest share we've seen in the 10 plus years we've been tracking those metrics.

[Samantha Fields]

And a growing number of homeowners are putting upwards of 50% of their monthly income toward taxes and insurance. Walden says one of the biggest factors driving insurance up in particular is climate change, which is making extreme weather more frequent and intense.

[Kristen Schwab]

More than 10% of US homes were directly in the path of a hurricane within the last six months. And then you can look at what's going on in Los Angeles with some of the largest, most destructive wildfires that we've seen in state history out there. Then you can look at the rising costs to repair and rebuild in the wake of those storms.

[Samantha Fields]

Because of all of that, insurers are increasingly refusing to renew homeowners policies and raising their prices. Amy Bach at the nonprofit United Policyholders says, while climate change is a big factor, what I think is more driving.

[Maya Frazier]

The premium increases and the reduced competition across the country is the explosion in insurer tech tools that insurers are using to make their business decisions. So for example, drone images of people's roofs and properties as a basis for.

[Samantha Fields]

Dropping them and artificial intelligence tools that mine databases with all sorts of information about homes to give them a risk score. They are taking these tools, these risk scores.

[Maya Frazier]

They are using them to non renew existing customers. They're using them to reject new applicants.

[Samantha Fields]

Also, the more a home is worth, the more it costs to insure and the higher taxes are too. Jenny Schutz at Arnold Ventures says most existing homeowners probably haven't had their taxes jump too much, even if the value of their house has.

[Maya Frazier]

There are a lot of ways that states and localities try to protect people against their property taxes going up by.

[Samantha Fields]

Capping how much the tax rate or dollar amount can go up each year. But there's no such cap when homes go up for sale. So people who are just buying now are likely paying more in property tax than longtime owners. Andy Walden at Intercontinental Exchange says all of this on top of already high home prices and mortgage rates means owning is increasingly unaffordable for many people.

[Kristen Schwab]

Among folks that are on the lower end of the income ladder, we've started to see mortgage delinquency rates start to creep up, especially among folks that have bought over the last couple of years.

[Samantha Fields]

For many others, homeownership is just eating up a bigger chunk of their monthly income. Kurt Olabak and his wife bought their house near Tampa in the late 1990s. Now their home insurance is almost $11,000 a year, plus a bit more for flood insurance, double what it was just in 2020. And even though they're paying a lot more, they have less coverage.

[Marketplace Host]

I've kept the cost down by increasing my deductible, which, you know, not necessarily a great thing.

[Samantha Fields]

Insurance costs are one of the reasons he and his wife are now planning to sell their house.

[Marketplace Host]

I'm still working largely because you know what's going to happen next with new insurance here in Florida, right?

[Kristen Schwab]

I can't say, hey, here's my income.

[Marketplace Host]

Stream needed in retirement when my homeowner's insurance may double next year.

[Samantha Fields]

So they're planning to leave Florida and move to Little Rock, Arkansas, mostly because that's where their daughter lives now, but also because housing and insurance cost less there, too. I'm Samantha Fields for Marketplace.

[Kai Rysdal]

This final note on the way out today, of which to be honest, it is difficult to know what to make. The Wall Street Journal reported this afternoon that Elon Musk and a group of investors have made an unsolicited offer to buy OpenAI, whence we got ChatG for $97.4 billion. Musk and OpenAI CEO Sam Altman have a history of bad blood, so it is difficult to know what is going to happen with this one. More chaos, probably honestly. Our daily production team includes Andy Corbin, Nicholas guillaume, Maria Hollenhorst, Iru Ekpenobi, Sarah Leeson, Sean McHenry and Sophia Terenzio. I'm Kyle Rysdal. We will see you tomorrow, Everybody.

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