By Imara Jones
As Americans took to their backyards and beaches to celebrate the unofficial start of summer this week, America’s housing industry—for the first time in years—is celebrating right along with them. In the past two months, home sales reached a level not seen since before the financial crisis in 2008, and the price of new homes—taken as a sign of the real estate market’s resurgence—reached their highest level in 20 years.
Many in the political and financial class are holding up this relatively positive new housing data as proof that the country has reached an economic oasis. And at first blush, the situation can be construed to be positive. The value of the U.S. housing market has climbed back to $16 trillion, exactly where it was before the economic crisis. Home prices and permits for new construction are up by double digits nationwide.
But rather than an oasis, these new gains might be an economic mirage. The reality of the current real estate renaissance is that the rich and those on Wall Street are raking in the cash while large segments of the population—especially historically marginalized communities—remain stuck in a downward, alternate housing reality.
Generally, housing recoveries are fueled by millions of Americans with new jobs, higher wages, available credit from banks and overall confidence that things will get better. But the real economy that most people live in day-to-day is too weak for all of that. Jobs are in short supply, wages are at historic lows and credit for middle and working class Americans is tight. With their economic ladder into homeownership taken away, many Americans can no longer participate in the housing market.
In their absence, financial firms and rich global jetsetters are snapping up hundreds of millions of dollars of property each week.