- - Sunday, October 9, 2011


Since 2000, there has been a precipitous 10 percent decline in the marriage rate among 25- to 34-year-olds. In 2009, the marriage rate among that age group dropped below 50 percent for the first time in our nation’s history.

There are, of course, many factors that account for the falling marriage rate, which started its downward trend long before the housing debacle set in — increasing education, more unmarried cohabitation, falling real wages and the declining moral fabric of America. But such a large drop in recent years points to the effect that the run up in housing prices had on first-time homebuyers and the economic effects of the housing fallout on employment.

Even as housing prices decline, the average home price in America is still almost four times annual income, making financing a home the only option for many people. When mortgages first took hold as the primary method by which Americans bought homes in the 1950s, the average house cost about one year’s income. The run up in housing prices has made it such that even those who get into homes don’t actually own them for most of their lives, holding less than 1 percent equity in many cases.

Today, with declining employment among young Americans, estimated at about 17 percent for those from the ages of 18 to 24, many have delayed long-term commitments because of their inability to support a household. They are often priced out of the houses near major employment centers and have had to move far out of metropolitan areas if they are to find an affordable place to live. In fact, the very term “affordable” has taken on almost Orwellian significance, as many find that they will essentially be in debt for most of their lives if they buy.

The effect on neighborhoods has been even more pernicious, with an estimated $500 billion a year in home equity lost since 2008. In 2009 alone, an estimated 91.5 million families lost more than $2 trillion in nominal home value. With almost half of all home sales since 2008 being foreclosures and short sales, neighborhoods have been decimated.

Not only has the home value for neighbors who stay in their homes gone down, but so have the neighborhoods themselves. Some neighborhoods in places like Riverside County in California and Loudoun County in Northern Virginia look almost like ghost towns, with practically brand-new vacant houses littering new developments.

Communities are feeling the strain all over the nation from a declining tax base, and increasing reliance of average Americans on public assistance programs such as unemployment compensation and food aid. Retirees are finding their options limited as home values (which many of them were relying upon to fund their retirement) decline and social programs are under pressure because of government fiscal problems. In fact, the gap between what most retirees want to sell their homes for and the demand for housing among first-time buyers is growing increasingly wide. Amid falling incomes, pernicious unemployment and credit tightening by the banks, this situation looks intractable for the time being.

To compound matters, the government’s (thus far failing) efforts to stimulate demand by increasing the money supply have lowered the interest rate that insurance companies and pension funds rely upon to pay out claims. The strain on savers because of historically low interest rates has driven many of them out of the usual safe harbors of government bonds and into the open sea of risk in search of higher investment yields.

• Armstrong Williams, author of the 2010 book, “Reawakening Virtues,” is on Sirius Power 128, 7 to 8 p.m. and 4 to 5 a.m., Monday through Friday. Become a fan on Facebook — www.facebook.com/arightside, and follow him on Twitter at www.twitter.com/arightside. Read his content on RightSideWire.com.

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