The Drudge Report is a news and economic report that conservative Right-Wing Republicans run. They claim their economic outlook for America is booming because the prices of housing appear to be in a downward spiral.

The issue needs to be brand something new or novel. Over the last two years, the price of housing has been an indicator of the economy in general. They do not reflect the state of the real estate market by itself.

Many economists have begun to extrapolate the changes in home prices to refer to a decrease or growth in the overall economy. This has led to a belief that house prices will always rise!

Housing is a peculiar good where people cheer on the price increase. Imagine if the cost of other basic necessities, such as clothing or food, was going up in a fast-paced manner. Would we still be celebrating the increase? What are the differences between housing and other types of housing?

How Increasing Housing Prices Impact People

A majority of people are less fortunate when prices for homes increase year after year. This is especially significant when the increase in the cost of housing is greater than the rise in wages.

In reality, the costs of houses are beyond the reach of people of all incomes. It is true that the taxes on property rates of the majority of houses in America are determined by the value of the real estate. Thus, a nominal increase in the value of real estate results in a real increase in rate of tax on properties.

For those who live in these homes, they can only increase their value on the paper. But their budgets immediately go down due to the increased tax burden.

Similar to when prices for property increase, gentrification becomes the standard. That means that people who have lived for a long time in their home have to leave due to the pressures of the market.

The upcoming generation of workers must be commuting even longer to work. Traveling to and from work is draining the economy as a whole.

It causes a waste of fuel and time is a source of stress and congestion in the roads. The huge traffic issues are seen in larger cities are due to the increasing prices for homes.

Finally, lastly, the amount of debt for families across America is growing each day. Housing debt makes up one of the largest percentages of total debt owed to Americans. Yet, Americans have been culturally trained for a long time to purchase houses.

Many Americans suffer from stress due to their massive mortgage payments. However, for some odd reason, our economy is prone to celebrating the rising cost of homes!

Government Apparatus That Favors Home Owners

The federal government of the United States has created agencies such as Freddie Mac and Fannie Mae. They buy all mortgages subordinated by banks. In essence, they’re the ones who actually lend money to individuals to purchase homes.

The government finances these agencies. In effect, the government uses the tax money that is collected from all citizens in order to benefit only a select few! In addition, as the mortgage market collapsed in 2008, the government intervened to recapitalize these institutions. It appears that the government has a legitimate interest in keeping house prices at a high level.

Undue Favoritism

The United States government is supposed to be neutral toward the economic options that people have. In the ideal scenario, they shouldn’t be concerned about how people manage their housing requirements. In their eyes, renting and owning a home should not matter! But it seems that the United States federal government does not think so.

For decades, they’ve created schemes to force homeowners to buy homes. They try to convince people that the benefits of owning a home are better than renting despite the fact that they each have similar consequences. A majority of people in America purchase homes through borrowing money.

This means they are required to pay similar monthly expenses to renters have to pay. In addition, like renters who do not make their payments, it is likely that they will end up in the streets.

What is the reason why the government is in favor of homeownership more than other types of property? What are the reasons for all the unjust tax breaks being granted to homeowners if they are not available to renters?

The Reasons for this Unjustified Preference

The government doesn’t consider housing as a social necessity. For them, it’s a matter of business. They must increase the GDP of the country.

That means they have to convince the citizens of the country to spend more. One of the most effective methods to achieve this is to promote homeownership. Homeownership is expensive.

This means that when the number of people who purchase these products, the total amount spent rises and, as a result, the GDP grows. This is positive for the government as they can say that their policies that have led to this growth in economics.

This is the reason the government provides tax incentives to those who buy houses. This is also why the government would like to create the appearance of rising prices for homes.

So long as people believe they’re making cash from this whole process, They will continue to purchase houses with inflated costs and make massive mortgage fees throughout their lives.

To summarize, increasing housing prices affect the real income of the population. But it is beneficial to the government. Therefore, they are the ones who incentivize lenders to continue funding mortgages and to create these bubbles in property.