The question is: Did you pay the rent? It doesn’t matter why.
Dreading the Constable’s Knock
Phoenix is the eviction capital of the US where Tenants Dread the Constable’s Knock.
On a recent afternoon, Rhys Torres crossed a partly shaded courtyard to a white stucco building. He tapped on a door and a woman in a fleece zip-up and sweatpants appeared.
“I understand what you’re here for,” she said. “You can come in.” But she began to panic in the cramped living room that held a bed. “I can’t breathe,” she said.
“Take a slow breath,” Torres told her. “We’re good. We’ll give you some time.”
That meant about 10 minutes. It was enough time to put together an overnight bag with a few essentials, and Torres told the woman she could come back for bigger items later.
Phoenix has emerged from the pandemic as one of America’s eviction capitals. Among U.S. cities, counties or metro areas for which regular data is available, Maricopa County holds one of the highest eviction rates, at 16 filings per 100 renter households during the past year, according to Eviction Lab, a research group at Princeton University that tracks evictions in 35 U.S. cities and 10 states.
Apartment rents in Phoenix rose about 35% from 2019 to 2023, and home sale prices went up more. Both have cooled somewhat recently, but not enough to make a difference for Maricopa County’s population of 4.6 million, which has grown by more than 20% since 2010. Rising rents are one reason Phoenix had the country’s highest increase in overall inflation two years ago.
Anxiety over housing costs is especially strong in this election swing state.
“I got half of it. I’m working hard on it,” said another tenant who had taken on extra work for DoorDash.
Judges allow time for these explanations, but only for so long. There is in the end only one question, and it can most often be answered with yes or no: Did you pay rent? If the answer is no, that usually ends the hearing. The landlord wins the eviction.
Not Just Phoenix
It’s not just Phoenix, or Arizona. Evictions are soaring in Texas and Nevada as well.
Evictions would be up everywhere if there were not restrictions in place, and there shouldn’t be.
Home Prices
Case-Shiller updated home prices yesterday. I have not yet updated my charts, but seasonally-adjusted home prices rose again.
Pre-pandemic, the national home price index was 336.2. As of last month, the index was 502.7. That’s an increase of 49.5 percent.
And mortgage rates are back above 7.0 percent.
CPI Indexes
Change Since Pre-Pandemic
- CPI: 21.6 Percent
- Food and Beverage: 26.1 Percent
- Rent of Primary Residence: 25.1 Percent
CPI Weights
Rent of primary residence is only 7.69 percent of the CPI.
For the 36 percent of people who rent it’s closer to 40 percent of the CPI. However, this is factored in by the BLS via Owners’ Equivalent Rent (OER) which has a 26.9 percent weight in the CPI.
OER is the price homeowners would pay if they rented instead of paying a mortgage.
Economic dunderheads believe the CPI is massively overstated and want a new calculation because the lucky homeowners refinanced putting extra money in their pockets every month.
The entire discussion is nonsensical but it takes place every month.
Living Paycheck-to-Paycheck
On October 22, I noted 20 Percent of Households Making Over $150,000 Live Paycheck to Paycheck
That’s a very lenient calculation because it only includes mandatory payments such as rent and food.
If you include things like vacations, pets, and travel, about 40 percent of people live PTP.
Why People Are Angry
The renters are mad as hell, and so is everyone living PTP. Others are mad over rising homeowners and auto insurance.
Well, homeowners and auto insurance are rising because the costs of homes, autos, and repairs to both are up.
Buy America
For starters, a 60 percent tariff on China would lead to much more than a five percent price hike on damn near everything.
Second, it certainly won’t help other than the few direct union beneficiaries.
Note how the wealthy are always willing to experiment with other’s lives (in the direction of their political beliefs, of course).
Trump Will Raise Taxes and Increase the Price of Goods
This is how I see things: Trump Will Raise Taxes and Increase the Price of Goods
Trump says he will cut taxes and reduce the deficit. But what’s the real story? My take is similar to David Stockman’s.
That’s certainly not an endorsement of Harris because I think she would be worse.
In many respects, for many people, no matter who wins, you lose.
Question of the Day
Think about the lead chart again for a moment. Are you better off now than four years ago?
If you rent or are living PTP, I suspect you aren’t.
And if you want to buy a home but can’t afford one, you certainly are not better off, even if you aren’t struggling PTP.
But if you are an asset holder, it’s far more likely you are better off now than four years ago. However, the group of better-offs is going to break heavily towards whatever political party they belong to.
Thus, it’s the independent voters, especially renters and those living PTP who will decide the election. This is what I have stated all year long.
Polling Trends
Right now it appears independents and last-moment deciders are breaking hard towards Trump.
But polls are not votes. It’s possible these swing voters are oversampled due to changes in polling methodology by the pollsters.
And the pollsters did change methodology, en masse (with only a few exceptions, NYT/Siena is one), to weighting by how people claimed they voted in the last election.
Another “Deplorables” Moment: Biden Calls Trump Supporters “Garbage”
For more on the election, please see Another “Deplorables” Moment: Biden Calls Trump Supporters “Garbage”
“The only garbage I see floating out there is his supporters,” Biden said. “[Trump’s] demonization of Latinos is Unconscionable and it is un-American.”
The fact is, people have bad memory recall, and there is a tendency to believe someone voted for a winner.
Also, I may very well be correct, but not enough to overcome Harris’ lead with White females.
This is why we have elections instead of polls.
Just received Blue Cross monthly premium increase of 15% and auto insurance of 17%. The latter because my state had 45% increase in auto theft in addition to the causes listed above. Inflation is very, very bad, and no government agency at any level wants it to know.
The fact that the government has sided with squatters over landlords actually causes higher rents and lower supply. Landlords don’t want to be screwed over. I had a home I could have rented out. I sold it instead because I didn’t want to deal with bad renters not making payments, destroying my property, and refusing to leave.
In my area it’s difficult to find anyone above a 600 credit score and 2x income to rent. Lookie Lou’s want to see the place first, No you fill out the application first 98% of them don’t. It would be easy to rent it but extremely hard to remove them… It’s still vacant.
Checking in for the 1st time since about 2008. Congrats on still being vibrant.
That patch of sidewalk ain’t gonna warm itself…
“Economic dunderheads believe the CPI is massively overstated and want a new calculation because the lucky homeowners refinanced putting extra money in their pockets every month.”
Is that one of those desired hedonic adjustments, to make things appear better than they are?
Tariffs are a threat, not a permanent policy.
One would think an economic analyst would understand this.
Wolf Richter of Wolfstreet has a recent blog post on this topic, including his replies within the comments section.
Tariffs can take one out of two forms:
1) a means to fund government. A pretty good one, even. At the very least it’s an economically justifiable one. For that to work, they’d have to be levied in a straight forward, non discriminating, efficient fashion that only minimally; meaning less than other alternatives for providing similar funding; distorts free market decision making and operations.
2)Mindless, economically trivially illiterate mumbo-jumbo, by and for only the dumbest and least illiterate of the dumb and illiterate. These tend to be of the entirely arbitrary “My dad’s going to to slap bigger tarriffs on you…..”, “My daddy’s going to threaten you..” “My daddy’s, like, tougher than your daddy!” kind……
Oct. 22, 2024
The State of U.S. Wealth Inequality | St. Louis Fed
Bernanke, pg. 287 in his book “The Courage to Act”, “Lower long-term rates also tend to raise asset prices, including house and stock prices, which, by making people feel wealthier, tends to stimulate consumer spending” (aka the “wealth effect”).
“Housing is considered unaffordable if it costs more than 30% of an individual’s income”.
Mish gets it. Banks don’t lend deposits. Deposits are the result of lending/investing. What people don’t get is the corollary, that all bank-held savings are frozen, lost to both consumption and investment, indeed to any type of payment or expenditure.
Economics is truly the dismal science. All of this was predicted in 1961. The increase in time deposits shrinks GDP. That’s why wage growth and productivity have stagnated since the mid 60’s.
I just don’t get the appeal of loan ownership. I’d rather rent, invest and sleep well at night without a mountain of debt worries to keep me up.
I know this looks bad, but stop for a minute and realize both sides of this equation. I think, like me, you will come away with “Good for Them” It may suck, but it makes sure it sucks for the proper person in this equation.
– Tenant says to Landlord: I got half of it. I’m working hard on it,” said another tenant who had taken on extra work for DoorDash.
> What do You personally have at stake? Need to Pack Up, and find another place to live.
– Landlord says to the Bank: I can’t pay you all of it.
> Bank says “A Foreclosure Notice” will follow.
Tenant keeps their Car, Cellphone, Gadgets, Etc. “And Lose Nothing”
Landlord Loses their House, Money, Credit, most belongings, and are broke, and playing catch up for a decade or more. Basically can “Lose Everything” as they have Skin in the game and a lot of it.
So I ask again, is this good for the Saver, Buyer of the House, and should the owner/Landlord risk losing everything, because a tenant is being irresponsible, lied, on hard times, roommate they were not supposed to have moved out on them Etc.
“OR”
Should the Tenant, with no skin, and absolutely nothing to lose, be able to, with the Laws Help, and No Regard for the Owner who Paid and has everything to lose?
NOTE: Judges allow time for these explanations, but only for so long. I think that’s more than fair.
America Progressive wish list of government spending (10% increase this fiscal year alone) created massive inflation destroying the working class. The ruling class, with real estate and stock portfolios, are doing just fine driving their taxpayer subsidized Teslas.
Not voting for Trump but for his personification as a giant middle finger to the ruling class of this country.
As a nice little side project, elites working hard to instigate WWIII to be fought by the same working class for benefit of the ruling class.
“In many respects, for many people, no matter who wins, you lose.”
Correct Mish. It does not matter who wins. Neither Harris nor Trump will improve your life. Only YOU can do that.
“Question of the Day
Think about the lead chart again for a moment. Are you better off now than four years ago?”
I am MUCH better off because I don’t waste my time on politics. I focus my attention, time and efforts on improving my life every single day. That’s how you get ahead. Not by being a dumb f*ck political junkie.
Yup, every 4 years, no matter who’s president, I get richer and richer. heck the past 3 years I didn’t even need to do anything but buy T-bills to earn hundreds of thousands. It was boot computer, logon, click buy t-bills, and profit. Took longer to get my Keurig to make me some coffee than it did to earn money.
Oh and my rental property checks came in right on time with no fuss, more money rolling in then my dividend stocks, capital appreciation, salary, bonuses, RSUs.
I now make so much money that I have to buy munis for the tax free interest. Lol. more money and it’s tax free. Only in America.
you must be miserable in life if you have to comment on a blog about how many t-bills you are buying daily.
Nope, the miserable people here are the ones that keep hoping for someone to save them. I come here for data that may make me get richer. Occasionally I show others that there’s a better way than whining, complaining and hoping for a savior that will never come.
The response is usually the same, much like yours, hostile and infantile. There’s a reason 80% of the wealth is controlled by 20% of the people, try to research why that is….hint: it’s not whining or waiting for a savior.
Your post is valid for only 1% of US population.
Also some old chumps have a lot of money to slosh around ( IRA accounts, CD’S, treasury bonds, rental properties etc.!
The gov might cut debt, but the bottom two quintile of income population (including the elderly) might double. The winners will be the tech sector, the unions and gov bureaucrats. The Pareto top might shrink a few inches as we age. The middle quintiles of income might develop a big visceral belly and a fat big asz at the bottom ==> an obese, sick society, with health problems.
Visceral fat : whatever they make isn’t enough.
You need to rework your AI here. The bottom 2 quintiles are Always 2×20% = 40% of the population, that’s what quintiles are.
So there’s no way the lower 2 quintiles can double!
The income distribution : those who earn between zero and $60K might double. Those between $60K and $400K might triple and those above $400K might shrink. Inflation will shift the income distribution. Tax collection will rise without raising tax rates. The middle class will be wealthier in nominal terms, but only enough to pay their bills.
A “tenant” who does not pay rent is a squatter.
Phoenix rent rose 35% between 2019 and 2023 : $500 x 1.35% = $675. or:
1,000 x 1.35 = $1,350. That’s how rent rose in the flyover areas. That’s about 7.5%/Y. The influx of illegal immigrants hurt poor Latinos in Phoenix, in Texas and Nevada.
Maybe the poor Latinos in Phoenix, Texas, and Nevada should go back where they came from?
In the PGH area an influx of innovative co attracted to gov money flow and talents caused a severe housing shortage. A young CMU engineers can earn between $80K/Y and $130K/Y, but the poor are homeless. Crime is rising. The boomers are moving south, but the zoomers are taking over. It is not the rich vs the poor. It’s the highly skilled and semi skilled employees vs the poor.
Education at Kahn Academy and public schools is free. In my case I studied and did homework until midnight throughout Jr. and Sr. high school. Poverty is a choice not a chance.
I watched a documentary on affordable quality home building after WWII. Builders were experimenting with new techniques like hollow interior doors, aluminum windows, pre-fabrication. They also had the backing of the Fed.
It’s hard to believe neither candidate is talking about a new home building era (not apartments) especially politically charged Elon. The technology has improved drastically since the 60’s. There is a way to do it and there is a need to do it so why not?
You could build pretty much anything you wanted in those days with whatever materials you wanted (lead paint, asbestos insulation, aluminum wiring etc). My parents had their first home built in the late 60’s just after I was born. Before we moved to a larger home in the late 70s (roughly 11 years later) the roof had already been replaced because it was leaking like a sieve and the house had lead paint that had to be painted over.
So no, those homes were not ‘quality’.
These days building codes are a lot more stringent so everything costs a lot more (new construction in Florida has to have storm impact windows for example, California has earthquake regulations etc).
My childhood home on Long Island was truly quality built in the 40s Large lot, slate roof, central AC and 3 inch framing throughout but it came at a price equal to 4 brand new levitt homes nearby
Agreeing with all of it.
Plus land costs as much as houses near places where people want to live.
even my 23 year old daughter said she voted for Trump
then again – she’s pretty smart and PAID HER WAY THRU COLLEGE
Strange how the comments mismatch the website. Posts skew heavily ‘R’ and the historical articles skewed heavily Libertarian, which could go either way, ‘R’ or ‘D’.
Edit: It was always this way, even in 2008.
This election is going to come down to evicted tenants, CRE/office building owners and mortgage bag holders, vegan Haitians in Ohio and P. Diddy party attendees. Hopefully Nate Silver completes his due dilly before Tuesday.
Elon’s DOGE would at least have the possibility of helping.
Housing costs are mostly about regulations. Lots of the regulations are local.
The Biden administration used federal loan backstops to force local governments to implement energy efficiency codes. A government trying to help people could use the same tactic to force local governments to deregulate housing.
https://www.hud.gov/press/press_releases_media_advisories/hud_no_24_089
Good link. It says the payback is “swift”. What more could I want? /s
The vast majority of HUD-financed units that will be built to the updated standards are single-family units, and the payback period—the amount of time it takes for homebuyers to start seeing savings through lower energy bills—for their homes is swift.
Since the 1970s, they’ve increasingly become authoritarian — for my own good of course. Started with banning CFCs and the “ozone hole”
My biased source:
https://www.heritage.org/environment/commentary/ozone-the-hole-truth
A Trump win will mean interest rates will go back to zero, and hundreds of billions in more free money will be borrowed (never to be paid back) by hedge funds and private equity to continue buying up houses (reducing the supply and increasing the rents), condos, stocks, bonds, businesses and other real estate. Will Kamala keep the rates at least above 3% to end this nonsense? Who knows. But we continue our progress toward 5000 families in the US owning 98% of everything, all financed with free money, never having to be paid back. The rest of us get to rent — no one will own anything — and be paid minimum wage.
Politicians only wished they controlled the interest rates.
Real estate is already drifting into feudal territory – but it has nothing to do with any President.
Above 3% will not end this nonsense Rates would need to be 10% plus
The key driver of rising income inequality is the stagnation of real wage growth for the bottom 80% or so of U.S. households (Taylor and Ömer 2020). Real wage growth was suppressed below labour productivity growth, and this led to a secular decline in the share of wages (and a rise of profits) in national income. The main cause of the wage growth suppression has been the abandonment of full employment as the primary target of macro policy-making, in favour of inflation control, at the end of the 1970s. Fiscal policy was deprioritized in favor of monetary policy, conducted by independent central banks, single-mindedly focused on building credible reputations as inflation hawks, and counter-cyclical fiscal stabilization was made anathema by subjecting fiscal policy-making to rigid and deflationary rules, irrespective of the business cycle. For a period of time after the global financial crisis of 2008, austerity zealots, dreaming of expansionary fiscal consolidations, intensified the fiscal repression, bringing about one of the slowest and most costly economic recoveries from a crisis in history.
Labour markets were enthusiastically deregulated, with the explicit and generous approval of central banks and governments, to break the structural inflationary power of unions and to create a flexible reserve of surplus workers with no choice but to work in temporary low-wage jobs in what is now known as the ‘gig’ economy. Globalization and offshoring contributed to breaking the countervailing power of organized workers because they offered corporations (the threat of) an opt-out possibility that was not available to workers. Taken together, the change in macroeconomic policy regime produced a structurally low-inflation economy, based on ‘traumatised workers’ in precarious jobs, who could not plausibly fight for higher wages and more secure employment conditions, given their daily struggles and the systemic biases they are facing. The wellspring of cost-push inflation had been radically removed.
Stagnant wages and incomes for the 90% mean that income (and wealth) inequality rises and that aggregate household savings go up (as shown by Mian, Straub and Sufi). Higher household savings reduce consumption demand, which holds up fixed business investment for the domestic market. In effect, aggregate demand growth stagnates, and pressures for demand-pull inflation evaporate. With inflation (and expected inflation) being low in structural terms, central banks lower the interest rate, in accordance with the recommendations based on the monetary policy rules proposed by establishment economics.
The low interest rates, in turn, fuel asset-price bubbles, creating wealth gains for the rich, and over-indebtedness for the bottom 90% of households, which use cheap credit to finance essential expenses on education, medical care and housing. This reinforces wealth and income inequalities, and pushes up asset prices even more, but this does not lead to higher economic growth and better jobs, because the richest 10% use their savings and wealth gains not for investments in the real economy, but to speculate in financial markets. The past two decades have made it abundantly clear that the gains made by the top 10% in financial markets do not trickle down to the real economy.
The most pronounced (negative) affect on real wages has been in those industries where immigrant labor (largely illegal) is predominant.
Blurt’s plagiarized analysis seems to have missed the global labor glut originating in Asia. Which has now about run its course. Past labor suppression may not persist.
Do you want to cite the source for most of this, or should I do it for you? Even if you were the original author, copy-paste is still plagiarism.
I don’t even understand the point … or recommendation.
My TLDR is “a number of past decisions resulted in our situation today”.
Word salad to me; although maybe presidential (soon).
Plagiarism! This is the internets, pligrim.
Naked Capitalism. Every time I put in a link it gets hung up. As German Industry Implodes, Country’s Wealthiest Make Out Like Bandits https://www.nakedcapitalism.com/2024/10/as-german-industry-implodes-countrys-wealthiest-make-out-like-bandits.htm
An increase in evictions means the local economy is not doing well either. How many prospective tenants are there? A tenant who pays half the rent is still more valuable than a vacant unit generating no income.
Apparently in Phoenix there is a lot since there is 20% population growth in the last 14 or so years.
Taking half the rent is a bad trap to fall into. Those tenants will tell others they are getting to stay for half rent. That in turn means other tenants will also only start paying half rent because they too will claim ‘they can’t afford the rent’ and soon you’ll be getting only half rent on all your places. Plus if you do find someone who can afford full rent, you can’t move them in because the person there has to be evicted which takes time (months) and by then that prospective tenant has moved elsewhere.
Trump’s plan is to lower taxes for the middle and lower classes and make up the difference in tariffs.
Onshoring and controlling the influx of labor will cause wages to rise and that is where relief will be found for reg ppl.
Relief will not, cannot, AND HAS NOT been found in open borders and outsourcing. Those are the facts.
CNN : Iran’s Martingale in the next few days. Diversion : Hezbollah might sign a ceasefire in the next few days.
DX 1M might test Sept 2022 high (recession), before plunging to the 80’s, or below (inflation). TNX 1M trend is down. Wall street gangs sent TNX in Oct to 4.339.
DX 1M might go straight down.
Reventure had a video on Phoenix a couple of days ago. Some property owners taking 20k or more in losses trying to sell.
https://www.youtube.com/watch?v=drP2tsN91G8
As for inflation, it’s ironic that the Fed has been causing inflation with policy and now that’s about to be exacerbated by whoever wins next week with either tariffs or more free money hand outs and more bad policies.
“It’s turtles all the way down and inflation all the way up!”
Anyone on fixed income, reliant on social security and hand outs will be hurting and howling.
Those taking only $20K in losses will be the lucky ones in the coming bust.
Regarding the 2020 election, I would add that votes are not always votes … hmmm.
Try evicting someone in NY. Even squatters, and they certainly haven’t paid their rent!
I evicted squatters that I didn’t know were there But it was on a farm that I bought at auction in Sag Harbor NY not in NYC The police asked me if I would press charges so I followed them to the station house to sign the papers
Maybe I paid my rent?
Yes, AZ, NV, TX enforce laws. CA, OR, WA do not hence fewer evicts.