{"id":1531377,"date":"2025-04-20T14:30:00","date_gmt":"2025-04-20T18:30:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1531377"},"modified":"2025-04-20T14:30:00","modified_gmt":"2025-04-20T18:30:00","slug":"the-family-home-from-shelter-to-asset-to-liability","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/the-family-home-from-shelter-to-asset-to-liability\/1531377\/","title":{"rendered":"The Family Home: From Shelter To Asset To Liability"},"content":{"rendered":"

The Family Home: From Shelter To Asset To Liability<\/span><\/p>\n

\n

Authored by Charles Hugh Smith via OfTwoMinds blog,<\/em><\/a><\/p>\n

The deflation of asset bubbles and higher costs are foreseeable, but the magnitude of each is unpredictable.<\/em><\/p>\n

With the rise of financialized asset bubbles as the source of our “growth,” family home went from shelter to speculative asset.<\/strong>\u00a0This transition accelerated as financialization (turning everything into a financial commodity to be leveraged and sold globally for a quick profit) spread into the once-staid housing sector in the early 2000s. (See chart of housing bubbles #1 and #2 below).<\/p>\n

Where buying a home once meant putting down roots and insuring a stable cost of shelter, housing became a speculative asset to be snapped up and sold as prices soared.<\/p>\n

The short-term vacation rental (STVR) boom added fuel to the speculative fire over the past decade<\/strong>\u00a0as huge profits could be generated by assembling an STVR mini-empire of single-family homes that were now rented to tourists.<\/p>\n

Now that housing has become unaffordable to the majority and the costs of ownership are stair-stepping higher, housing has become a liability.<\/strong>\u00a0I covered the increases in costs of ownership in\u00a0The Cost of Owning a Home Is Soaring<\/a>\u00a011\/11\/24). Articles like this one are increasingly common:<\/p>\n

‘I feel trapped’: how home ownership has become a nightmare for many Americans<\/a>:\u00a0Scores in the US say they’re grappling with raised mortgage and loan interest rates and exploding insurance premiums.<\/em><\/p>\n

The sums of money now required to own, insure and maintain a house are eye-watering.<\/strong>\u00a0Annual home insurance for many is now a five-figure sum; property taxes in many states is also a five-figure sum. As for maintenance, as I discussed in\u00a0This Nails It: The Doom Loop of Housing Construction Quality<\/a>, the decline in quality of housing and the rising costs of repair make buying a house a potentially unaffordable venture should repairs costing tens of thousands of dollars become necessary.<\/p>\n

Major repairs can now cost what previous generations paid for an entire house, and no, this isn’t just inflation; it’s the result of the decline of quality across the board and the gutting of labor skills to cut costs.<\/p>\n

Here’s the Case-Shiller Index of national housing prices.<\/strong>\u00a0Housing Bubble #2 far exceeds the extremes of unaffordability reached in Housing Bubble #1:<\/p>\n

<\/a><\/p>\n

Here’s a snapshot of housing affordability:<\/strong>\u00a0buying a house is now an unattainable luxury for those without top 20% incomes and help from parents.<\/p>\n

<\/a><\/p>\n

The monthly payments as a percentage of income are at historic highs:<\/p>\n

<\/a><\/p>\n

Property taxes are rising in many locales<\/strong>\u00a0as valuations bubble higher and local governments seek sources of stable revenues:<\/p>\n

<\/a><\/p>\n

Home insurance costs vary widely, but all are skewing to the upside<\/strong>.<\/p>\n

<\/a><\/p>\n

As I often note, the insurance industry is not a charity, and to maintain profits as payouts for losses explode higher, rates have to climb for everyone–and more for those in regions that are now viewed as high-risk due to massive losses in fires, hurricanes, wind storms, flooding, etc.<\/p>\n

<\/a><\/p>\n

All credit-asset bubbles pop, and that inevitable deflation of home valuations will take away the speculative punchbowl. What’s left are the costs of ownership.<\/strong>\u00a0As these rise, they offset the rich capital gains that home owners have been counting on for decades to make ownership a worthwhile, low-risk investment.<\/p>\n

The deflation of asset bubbles and higher costs are foreseeable, but the magnitude of each is unpredictable.<\/strong>\u00a0The ideas that have taken hold in the 21st century–that owning a house is a wellspring of future wealth, and everything is now a throwaway destined for the landfill–are based on faulty assumptions, assumptions that have set a\u00a0banquet of consequences<\/em>\u00a0few will find palatable.<\/p>\n

*\u00a0 *\u00a0 *<\/p>\n

Become a $3\/month patron of my work via patreon.com<\/a>.<\/em><\/p>\n

Subscribe to my Substack for free<\/a><\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nSun, 04\/20\/2025 – 10:30<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/family-home-shelter-asset-liability<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

The Family Home: From Shelter To Asset To Liability Authored by Charles Hugh Smith via OfTwoMinds blog, The deflation of asset bubbles and higher costs…<\/p>\n","protected":false},"author":0,"featured_media":1531378,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-1531377","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbimBl-6qnD","jetpack_featured_media_url":"https:\/\/bugaluu.com\/news\/wp-content\/uploads\/sites\/3\/2025\/04\/Case-Shiller-index2-25a-7CCGTU.jpeg","_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1531377","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1531377"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1531377\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1531378"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1531377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1531377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1531377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}