Despite promising to reduce housing costs, the Biden administration has presided over a surge in home prices, making it more challenging than ever for Americans to purchase a home.
Despite promising to bring housing costs down for consumers, the most recently available housing data reveals that it has never been more expensive for Americans looking to purchase a home. Data from the Case-Schiller Home Price Index, U.S. Census Bureau, and Federal Reserve shows that the cost of purchasing a home relative to household income is at an all-time high.
Home prices are now 7.64 times greater than the median household income. Prior to President Joe Biden entering the White House, the highest ratio of home prices to household income occurred in 2006, at the pinnacle of the President George W. Bush-era housing bubble. In January 2006, housing prices were 6.82 times greater than the median household income.
The high housing costs witnessed under the Biden administration are a remarkable departure from historical norms. From 1978 through the end of 2001, housing prices were between four and five times greater than annual household incomes. Housing prices soared in the early 2000s, but they did not reach current levels at any point during Bush's presidency. Then they crashed hard from 2006 to 2009, triggering the Great Recession.
Throughout Barack Obama and Donald Trump's presidencies, housing prices were significantly lower than they are now. Prices were typically five to six times higher than the average household income. Economic growth occurred during long periods of both Obama and Trump's terms, but prices did not come close to matching the numbers we have seen since the Biden administration took over.
Since March 2022, the ratio of home prices to median household income has continuously stayed above seven, meaning housing prices have been at least seven times greater than household income for most of Biden's presidency. Even worse, the most recent data shows prices appear to be on track to become eight times higher than household income before Biden's first term ends.
There are many factors that affect housing prices, but two of the biggest are Biden's reckless spending policies and his costly assault on traditional energy sources, such as oil and natural gas.
Under Biden, the federal government has gone on an unprecedented spending spree. Federal outlays surpassed $20 trillion in Biden's first three years in office, far more than any other president's first three years. Deficits have also remained at extremely high levels. Biden's federal deficit for fiscal year 2023 was $1.7 trillion. That's the biggest deficit in U.S. history, excluding the COVID-19 lockdown years of 2020 and 2021.
Biden's addiction to spending has fueled inflation across the economy, from food prices to insurance costs, but housing prices have been impacted more than nearly every other area.
Biden's war on fossil fuels has also played an important role in driving up housing prices. When energy prices rise, they increase the cost of harvesting, manufacturing, and transporting the supplies and tools needed to build homes, increasing home prices in the process.
The Biden administration has repeatedly pledged to move the U.S. economy away from oil, natural gas, and other affordable fossil fuels, a promise it has kept through a series of international agreements and regulatory actions.
These policies have sent a clear signal to fossil-fuel companies: Biden and congressional Democrats are committed to killing most forms of traditional energy development. As a result, many energy companies have scaled back operations, compared to pre-pandemic levels, and have kept prices high.
Biden's anti-fossil-fuel agenda has made energy much more expensive than it was during Trump's time in office. For example, when Biden entered the White House in January 2021, the average price of gasoline was $2.32 per gallon. Last month, it was $3.73, and it hasn't been lower than $3.00 since April 2021.
Electricity prices have also soared to all-time highs under Biden. Consumers and businesses are now paying nearly 28% more than they did when Biden took office.
These surging prices have contributed to higher costs for homebuilders, increasing home prices.
Higher housing prices, higher mortgage rates, and little hope for improvement in the near term — that's the real impact of Biden's radical economic agenda. The Biden administration has failed to address the underlying causes of the housing crisis, and as a result, the dream of homeownership is becoming increasingly elusive for many Americans.
