Let's talk about housing prices, metal shop guys, and solutions....
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Why do better wages and benefits matter more than building more houses?
Well, howdy there, internet people it spell again. So today we're going to talk about housing prices, metal shop guys, and solutions. If you don't know, we have a running series answering questions from guys who work in a metal shop and listen to political YouTube videos while they work. Recently, we talked about Trump's fifty year mortgage plan that he was reportedly sold on because he got an unvetted piece of poster board. In it, I said the solution to housing affordability is better wages and better benefits. That prompted this question. Miss Belle, we have to ask, because you're normally very careful with your words. Can you explain why the solution is better wages and benefits and not more supply of houses?
It seems like the easiest fix is to just have more houses built.
How does the metal‑shop example illustrate supply‑price dynamics?
Increase the supply and prices go down, right? Yep, generally speaking, increase the supply and prices go down. I'm going to use a metal shop as an example, but those listening, apply this same thing to your industry. I'm using the metal shop because I know y'all make tractor implements and know you work weekends sometimes because you had more work than you could handle without overtime. At least before the tariffs. That tells me you have your product priced just right. Exactly what the market in your area will bear. You make tractor implements. You sell them for a thousand apiece.
What do the 1985 vs 2023 income‑to‑home‑price ratios reveal about affordability?
I know you don't, it's just to make the math easier. You sell ten a week and make two hundred in profit off each one. two thousand a week profit. Next week I want you to make fifteen. Increase supply and sell them at 900 apiece, lower price. It costs the same amount to make, so now you're only making a hundred bucks profit on each one. You're now making fifteen hundred a week and doing more work. Does that sound like something a company would do? But they absolutely would make fifteen if they could sell them at a thousand and make two hundred in profit, right?
Why aren’t builders flooding the market with new homes despite high prices?
Now, let's convert this to houses using real numbers. In nineteen eighty five, the median household income in the United States was twenty three thousand six hundred twenty dollars. Median new home price at the time was eighty four thousand three hundred dollars. That's three point six times the median income. In twenty twenty three, the median household income was eighty thousand six hundred ten dollars. So two hundred and forty one percent more. Meanwhile, the median price of a new home grew four hundred eight percent and to four hundred twenty eight thousand six hundred dollars. So it's now five point three times the median income.
What is the proposed solution to make the American Dream attainable again?
The builders know the market will bear these prices. There's no huge incentive for somebody to come in and flood the market with new homes to drop prices. Not if the cost of production is the same. Last numbers I saw said there were more sellers than buyers right now anyway. However, if wages went up, the The builders would be incentivized to build more houses because they could still charge what they already know the market will bear. In short, you need more supply, but to get that, you have to kickstart it with more people who can afford what the market will bear. Short version. Price stickiness applies to houses, and the solution is appreciating the working class and paying them what they're worth so they can have the American dream.
That is frankly turned into a nightmare for most. Anyway. It's just a thought y'all have a good day.
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Chapters
5 chapters
1
Why do better wages and benefits matter more than building more houses?
0:01–1:00
2
How does the metal‑shop example illustrate supply‑price dynamics?
1:00–1:45
3
What do the 1985 vs 2023 income‑to‑home‑price ratios reveal about affordability?
1:45–2:28
4
Why aren’t builders flooding the market with new homes despite high prices?
2:28–3:16
5
What is the proposed solution to make the American Dream attainable again?
3:16–4:18
Speakers
1 identifiedMore from Belle of the Ranch
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