The Blubber

Per Bloomberg

As interest rates reach a 15-year-high, Americans are now forced to agree to unfavorable loan terms. Almost a third of car buyers are now taking six- to seven-year loans to help them afford the purchase.

Ludwig Institute for Shared Economic Prosperity economist Philip Cornell gave a statement regarding how consumers struggle to deal with higher interest rates. The economist's institution focused their research on families with lower to middle income.

Cornell: “Consumers who weren’t able to make ends meet are just digging themselves a deeper and deeper hole with the higher interest rates,”

Aside from car loans, housing prices have also increased, making it hard for regular individuals to afford homes. A National Low Income Housing Coalition report showed how a full-time minimum-wage worker still won't afford a two-bedroom rental anywhere as the country still lacks adequate, affordable housing.

The report names the COVID-19 pandemic, and its economic effects underscore the need for a better housing safety net in the country. The NLIHC's senior vice president of public policy and field organization, Sarah Saadian, gave a statement regarding what needs to be done.

Saadian: "We're not investing in solutions at the scale that's needed,"

As a solution to the expensive housing problem, families are buying homes together or relocating to areas with more affordable real estate, per CNET. For families living paycheck to paycheck, housing is now their biggest expenditure.

Harvard University's The Joint Center for Housing Studies says that for low-income renters, after paying for houses, they are left lacking in terms of other expenses like food, health care, and other needs.

One problem with the rising prices is that more Americans are now at risk of eviction, homelessness, or even resorting to living in shelters. A US Government Accountability Office released a study showing that a $100/month average rent increase was associated to a 9% increase of homelessness in particular areas.

Resources:

Bloomberg

National Low Income Housing Coalition

CNET

The Joint Center for Housing Studies

US Government Accountability Office

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