After World War II, the GI mortgage program made homeownership affordable and built middle-class wealth. In the 1980s, banks and investment firms started buying homes in bulk as profit vehicles, pushing prices up. Now wages have stagnated while housing costs soar and interest rates spike, locking younger generations out of buying.
This is a $450,000 house. It's insane how these prices are just getting higher and higher. And here's the reason why. Let's go back to the 1940s. The government wants more people owning homes, so they give soldiers coming back from World War II super cheap, super long mortgages. And it works great. Homeownership skyrockets, houses are affordable, and the middle class can afford to save money on the side too. Then the '80s comes along. Banks start realizing homes aren't just places to live, they're an investment vehicle as well. So giant investment companies start buying up homes in bulk. This drives housing prices up, which in turn meant more companies wanted in on the action. People who People who already own houses are happy too, because their investment, well, that's going up as well. And fast forward to today, house prices have been rising faster than wages for decades. Plus, loans are more expensive because of high interest rates. So younger generations can't save money and buying a house is way more expensive and they're stuck renting. And this is terrible for the whole economy. Want to know why? Check out the video linked here.
