Economic inequality always increases in post-Bretton Woods crises where governments do not create new productive projects; in this crisis, it has exploded. The Federal Reserve and Congress have drastically increased inequality in the United States.
The housing market in America is starkly divided. Seventeen million households face a “mortgage crisis” of coming foreclosures, and an “eviction crisis” far larger, already in process although held back somewhat by Trump’s executive order. But at the same time, sales of existing homes and new homes are both substantially higher than a year ago, actually at their highest level since 2006. The median — not just the average — existing-home sale price now exceeds $300,000, which is unprecedented and is 8.5% higher than last July; the median new home sale is about $370,000. Total homes-for-sale inventory is only three months’ worth of sales, exceedingly low. The houses being built are detached homes, larger than one year ago.
Why? Those workers across the country who have kept their jobs — white collar workers in government, business, and industry particularly — have had their income rise during the economic breakdown due to relief checks and tax deferrals, and their household wealth has risen to the extent they are invested in the Fed-fed stock and bond markets; mortgage rates are the lowest in history. They are buying big homes to telework in the suburbs and exurbs, with extra rooms for home offices. Meanwhile the workers who have lost their jobs are at the lower-wage part of the scale; $3,000 relief money in six months is very little, and expanded unemployment was delayed months for millions. They have little or no household wealth and have been pushed down into a hand-to-mouth state, putting off paying their rent or mortgage, but now unable to do so any longer.
