[Townhall] Washington never learns. Never. Politicians are like collective Alzheimer's disease patients. They have no short-term memories.Does anyone remember 2008? It was only 14 years ago. Then, America suffered through one of the most significant and most painful financial crises in our nation's history -- and the worst losses since the crash of 1929. Millions of people lost their jobs. Hundreds of thousands defaulted on their mortgages and lost their homes.
Trillions of dollars of lifetime savings and wealth evaporated. Central billion-dollar banks and investment houses that were thought to be invincible were swept away like straw huts in the face of a tsunami.
The calamity resulted from government policies that intentionally inflated a housing bubble year after year. Few saw the bursting of the bubble coming. When it popped, the carnage was everywhere and felt from coast to coast.
Now there are many of the same flashing signs of a housing bubble -- and again, no one is paying attention.
A well-respected housing affordability index fell last month to near the lowest level ever as home prices surged.
Mortgage interest rates now exceed 5.2% -- up from 3.6% just two years ago. In some markets, rates are nearing 6%. And the Fed is raising rates again, as it should, but this too will likely further inflate mortgage rates.
The average mortgage payment is now $1,800 a month -- 70% higher than before COVID-19 hit. Many people live paycheck to paycheck and are already financially squeezed due to prices rising faster than paychecks. The only other time home payments were as high as they are today was in 2007. Yes, on the eve of the Great Financial Crisis.