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The U.S. national debt has hit record highs at $37 trillion and the cost of paying interest is bigger than what the country spends on our defense budget. See the numbers here> U.S. Debt Clock. So why does this matter for housing? When the government borrows a lot of money, interest rates go up. That means mortgages become more expensive, and it makes it harder for builders and developers to start new projects, lessening supply, because of higher costs. This is why when you see new homes being built, they're typically larger than average. Builders need to have enough profit to make the upfront cost expenses from not only the increased material costs, but government induced taxes and higher rates from borrowed money.
Additionally, debt can add to inflation, which pushes up the cost of homes, rent, and just about everything tied to owning a property. Inflation is the main reason why everything we buy today is so much more expensive than 5 years ago.
Now as debt grows, there is less money for projects besides housing, like community investments or other programs. This is why we will see city taxes and energy costs go up. Add this to every other issue and you can see why housing has become less affordable.
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