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Alarming New Data Uncovers Widespread Economic 'Distress' Across America Despite Post-Pandemic Growth

The US economy shows a striking disconnect: continued growth and softening inflation coexist with pervasive pessimism and uncertainty among Americans. President Biden emphasized the need for stability and job creation in an interview with Yahoo Finance. However, data from the Economic Innovation Group (EIG) reveals that local economies across America haven't fully recovered from the pandemic.

As of 2023, approximately 52 million Americans live in "distressed" zip codes, up from 50 million in 2018. Urban areas, in particular, have seen increased economic distress, while suburbs appear more prosperous. For instance, Cleveland's city core is mostly distressed, whereas its suburbs thrive. The pandemic has exacerbated economic disparities, with population shifts from cities to suburbs and exurbs.

Cities like Fort Worth and Oklahoma City illustrate these trends. Fort Worth's urban core remains distressed despite overall population growth. Similarly, Oklahoma City grapples with economic inequality, despite efforts to invest in its tourism industry and create jobs.

Housing affordability is a significant issue, with rising demand driving up prices. Cities are struggling to provide middle-income housing, impacting essential workers. The shift to remote work and changing housing preferences have fueled suburban growth, further highlighting urban-rural economic divides. Read More.

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Housing Prices Hit Record High in March

In March, home prices hit a new record high due to an ongoing housing shortage, despite high mortgage rates making affordability increasingly difficult for many Americans. According to the S&P CoreLogic Case-Shiller index, prices increased 6.5% year-over-year and 0.3% month-over-month, marking the fastest growth since November 2022. The 10-city composite, including major cities like Los Angeles and New York, rose 8.2%, while the 20-city composite saw a 7.4% increase. San Diego led with an 11.1% year-over-year rise, followed by New York and Cleveland.

The affordability crisis is driven by years of underbuilding, high mortgage rates, and costly construction materials. The "golden handcuff" effect, where homeowners with low mortgage rates are reluctant to sell, further limits supply. Economists predict mortgage rates will stay high in 2024, potentially easing only when the Federal Reserve cuts rates, but unlikely to return to pandemic lows. Read Now.