Transcript
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Clark Howard (1:05)
It's my pleasure to welcome you to the Clark Howard show where our mission is to serve you with advice and information that empowers you to make better financial decisions in your life. Today is our first show show of the month of Febru ugly, but the reality, the good news sunsets a little later day by day. And I know if you live in a cold climb, well, we're marching towards better weather. And I got some positive things to talk about today. First, I want to talk about how important mobility is in life. I'm not talking about, you know, the physical mobility, you walking around, that's important, but flexibility to other places, other jobs. The more you keep your eyes and ears open and the more flexible you are, well, the more opportunity knocks. So I want to start by talking about that in a way that we don't do anymore. Americans used to move a lot and so much out there about how people are never going to be able, never. People who have not been able to buy a home will never be able to buy one. And it's a fact. It's become really hard for first time home buyers. The average age that somebody buys a first home is almost a decade older than it was not that long ago. Things have, at least for now, changed and time is going to help that because over time, as people's incomes go up, housing has to go through a time of a timeout. Basically that's why in so many markets, housing prices have stalled. Some markets prices have actually declined, some not A precipitous drop, like from the banking scandals and the Great Recession. None of that because all the fraud that happened then. But over time, the affordability issues. Time will heal. But what if you don't want to wait that time? So I saw something recently which was an article talking about how basically your life's never going to be the same if you can't buy a home like prior generations did. And that is jumping to conclusions I don't support because the reality is we've always had markets in the United States where housing is so expensive that people who live a middle class or upper middle class lifestyle, who in other zip codes in the United States would reach an age point where they buy a home, in many of those places, people rent through the years because financially it makes more sense in those markets to rent instead of buy. And I could name a bunch of them. A lot of them are in California, Oregon, Washington, New York, Massachusetts, Connecticut. There are any of a number of places that's true. And because it's so much a part of the culture that people rent or buy even as their income rises, it is not the disruptor that I've read that people believe this lack of affordability is really stunning people's development through their lives. I don't buy that, but I do understand 100% because I remember when I bought my first home how much that meant to me. And there are things you can do going back to the mobility that make a difference. I've seen these charts of where housing is affordable and where it's not. And there's a huge swath of the country that housing remains very affordable and people on a traditional middle class income can afford to buy a home and even a bit more. So now that mortgage rates have come down, you know, more than a little bit, they've come down to a point that makes them not like they were, you know, last decade, early last decade, but still more reasonably affordable. And so if you look at the stats, inventories have been rising. Do you know that there's roughly 20 states in the country, from what I've been studying the stats, that there's now more inventory for sale than there was before? COVID That's right. In many states now the buy demand equilibrium is back to where it should be, even a little higher in favor of buyers. And so think about this too for. And I'm going to talk more about the job thing later. Think about if you feel kind of stuck in your job, you feel like you kind of dead ended or hit some kind of Ceiling. Well there may be opportunity somewhere else in the country for a better job and it could be a place that's the twofer that also has more affordable housing. So think what I have always called and people used to call the heartland, much of the Midwest, a lot of the mid south and a lot of the states blending towards where the eastern half of the states are more Midwest and the western part of more mountain states. Think the Dakotas, think Nebraska. There's opportunity for affordable housing. I saw an item, I forget where it was one of the things I read story about a town I love Appleton, Wisconsin which in my radio career in syndication I spent a lot of time visiting markets in Wisconsin. I always loved Appleton. And so I saw this article about it and how affordable housing is and how people are able with a regular middle class job to buy a nice home in a nice neighborhood. And then there were. There was almost like an afterthought talking about how crazy cold it is in the winter and how little daylight there is in the winter. And that that's the trade off you got to look at with a lot of the markets in the United States that are affordable, particularly in the Midwest and northern Midwest. But it's just a fact that this lack of affordability we see along the coasts, both coasts is not the story everywhere.