Goldman Reveals Housing "Affordability Illusion" When Factoring Other Costs

Affordability has surged into the news cycle and is almost certain to dominate the coming midterm election cycle. And when voters talk about "affordability," they're most concerned about the basic cost of living. Beyond food and healthcare, nothing hits harder than housing costs. 

Goldman analysts led by Arun Manohar have some bad news on the housing affordability front: even with lower mortgage rates and slower home-price growth, it's largely an "illusion of affordability" once other ownership costs, such as taxes, insurance, and maintenance, are factored in. 

Manohar explained more in a recent note to clients:

The most important topic of discussion in the housing market remains the challenging affordability situation. The recent decline in mortgage rates and the weak pace of HPA has resulted in housing affordability climbing to the highest level since 2022 (Exhibit 1). However, affordability remains low at the 18th percentile over the past 30 years. Although affordability has climbed, it is important to note that the standard affordability metrics do not capture all the costs of homeownership such as taxes, insurance and maintenance (collectively referred to as 'other costs'). To capture the effect of 'other costs,' we rely on estimates from Zillow for the monthly mortgage payment and total monthly payment on a new home purchased with the average interest rate of the month. The difference between the two series accounts for homeowner's insurance, property taxes, and maintenance costs. We find that metro areas that have experienced home price declines over the past year have generally witnessed greater increases in the 'other costs' over the past few years (Exhibit 2). Although falling home prices would typically make a home more affordable, prospective buyers may experience only partial relief since overall homeownership costs are not decreasing at the same rate as property values. With the median age of the US housing stock being over 40 years old, nationwide insurance premiums and maintenance expenses could increase further.

Mortgage rates are unlikely to decline enough to provide a significant boost to affordability in 2026. 

Manohar's view on President Trump's newly proposed 50-year mortgage: 

50-year mortgages: Short-term affordability boost, but with long-term consequencesRecently, the administration and the FHFA Director have explored the feasibility of introducing a 50-year mortgage product to help improve mortgage affordability. The 30-year fixed rate mortgage available in the US is already among the longest in the developed world. We see four key issues with a 50-year mortgage. First, while monthly payments decline slightly, the increase in the lifetime cost of homeownership can be prohibitive. Using the example of a $400k mortgage at 6.25% interest rates, we note that if the term were to be extended to 50-years, the monthly principal and interest payment would be about 11% lower than that if the term remained at 30-years. However, the total lifetime interest would climb 87% (Exhibit 4). Second, the above calculation assumes mortgage rates are the same for 30-year and 50-year mortgages. In reality though, the longer term will likely translate into higher mortgage rates and hence lower savings in monthly payments. It is quite likely that a 50-year mortgage would receive a rate that is at least 50bp higher than that on a 30-year mortgage (Exhibit 5). Using the same example of a $400k mortgage and the assumption that a 50-year mortgage receives a 50bp higher rate than the 30-year mortgage, the savings in monthly payment drops to just 5%, and the total lifetime interest would more than double. A mortgage rate that is 95bp higher than the prevailing 30-year mortgage rate of 6.25% would result in parity in monthly payments, completely nullifying the benefits of extending the term to 50 years. Third, with a 50-year mortgage, borrowers would build equity at an even slower pace than that with a 30-year mortgage during the initial years, which increases default risks in a housing downturn scenario. Finally, a sudden boost to affordability risks increasing home prices, as potential homebuyers would compete for the same limited inventory. Therefore, any improvement in housing affordability would be short lived.

In a recent Fox News interview, Vice President JD Vance blamed the affordability crisis on lingering effects of failed policies from the Biden-Harris years.

"A lot of young people are saying, housing is way too expensive. Why is that? Because we flooded the country with 30 million illegal immigrants who were taking houses that ought by right go to American citizens," Vance told Fox News' Sean Hannity last month. And at the same time, we weren't building enough new houses to begin with, even for the population that we had."

ZeroHedge Pro subs can read the full note in the usual place. It's packed with a lot more housing market charts.

Tyler Durden Sun, 12/07/2025 - 09:55

Climate Groups Falter, Bill Gates Recalibrates, But Al Gore Soldiers On

Authored by Gary Abernathy of The Empowerment Alliance,

It’s been an interesting few weeks on the climate hysteria front. Organizations associated with climate alarmism have recently found themselves engulfed in turmoil. Bill Gates has recanted earlier predictions of gloom and doom. But the Father of Climate Panic, former Vice President Al Gore, remains steadfast, if increasingly marginalized.

Let’s start with probably the best-known environmental organization in the world, the Sierra Club. According to a recent New York Times report, the club thrived when it seemed laser-focused on the environment. But then, during Donald Trump’s first term, “its leaders sought to expand far beyond environmentalism, embracing other progressive causes. Those included racial justice, labor rights, gay rights, immigrant rights and more.”

As a result of the effort to morph into a catch-all for a myriad of social justice causes, the Times noted that by 2022 the Sierra Club “had exhausted its finances and splintered its coalition.” By August, according to the Times, the number of Sierra Club “champions” – “a group that included dues-paying members as well as supporters who had donated, signed petitions or participated in events” – was “down about 60 percent from its high in 2019.”

Despite the upheaval, few lessons seem learned. The Times noted that “in recent weeks, supporters who clicked on the group’s website for ‘current campaigns’ were presented with 131 petitions, some out of date, like calls to support clean-energy funding that Mr. Trump has already gutted, or to support a voting-rights bill that died in 2023.”

Asked whether he had any regrets, the club’s current board president, Patrick Murphy, summoned the spirit of Kamala “not a thing comes to mind” Harris and replied, “I have a hard time pinpointing how I believe we should have made different choices.” Alrighty then.

Also falling on hard times is 350.org, which first gained notoriety for its successful efforts to block the Keystone XL oil pipeline during the Obama administration. As Politico reported this month, the group “will ‘temporarily suspend programming’ in the U.S. and other countries amid funding woes.”

Executive Director Anne Jellema said 350.org “had suffered a 25 percent drop in income for its 2025 and 2026 fiscal years, compelling it to halt operations,” and would subsequently reduce its global staff by about 30 percent.

“The group had endured economic hardship over the years, including problems of financial management and several rounds of layoffs that eroded its influence,” Politico reported. Jellema said the organization was facing its challenges “with our ambition intact.” But apparently not much else.

An implosion of a different kind is from the world of “green banking.” NBA star Kawhi Leonard’s endorsement contract with the pro-environment group Aspiration is alleged to have been a vehicle for Leonard and the Los Angelas Clippers to skirt NBA salary cap rules.

As reported by ESPN, Aspiration Partners was a company founded in 2013 to provide “socially-conscious and sustainable banking services and investment products.” Their slogan was, “Do Well. Do Good.” Catchy. Operating like an environmentally conscious digital bank, Aspiration promised to “never fund fossil fuel projects like pipelines, oil rigs and coalmines.” The company’s products included “an option to plant a tree with every purchase roundup.”

According to ESPN, Clippers owner Steve Ballmer invested $50 million in Aspiration. The subsequent allegation is that Leonard signed a $28 million endorsement deal with Aspiration “as a way to circumvent the league’s salary cap.” Ballmer has denied any knowledge of the deal, according to the report. Leonard has also denied any wrongdoing.

ESPN reported that Aspiration filed for bankruptcy in March, and co-founder Joe Sanberg pleaded guilty to two counts of wire fraud after “federal prosecutors said Sanberg defrauded investors and lenders out of $248 million by fraudulently obtaining loans, falsifying bank and brokerage statements and concealing that he was the source of some revenue booked by the company.”

The NBA is investigating. How many trees Aspiration planted is unknown.

To add insult to injury comes what appears to be an about-face from no less a dedicated environmentalist than Bill Gates. For decades, Gates has been a leader in the movement to reduce carbon emissions. But last month he caused a stir when he declared that climate change “will not lead to humanity’s demise.”

It’s heartening when others finally catch on. Earlier this year, the climate group funded by Gates, Breakthrough Energy, laid off dozens of employees in the U.S. and Europe “as it pulls back from public policy advocacy work that was a cornerstone of its mission,” as the industry site Energy Connects reported.

Sadly, such admirable retrospection will likely never occur to Al Gore, arguably history’s leading figure in propagating climate hysteria and someone who has reportedly made a fortune from his climate alarmism. Gore’s reaction to Gates’ newfound enlightenment was a predictable temper tantrum during which he speculated that Gates had succumbed to “bullying” by President Trump.

Takes one to know one – Gore has often been accused of bullying those not on board with his climate crusade.

In an increasingly splintered movement that once marched in lockstep, it may be that someday only Al Gore will remain – the last true believer of a story he largely authored, perched atop his high horse at his solar-powered compound.

Tyler Durden Sun, 12/07/2025 - 09:20

Trump's 3 Choices In Ukraine (A Win-Win-Win For Russia)

Authored by James Rickards via DailyReckoning.com,

With the War in Ukraine now approaching its fifth year and possibly reaching a climatic stage, it’s timely to offer an overview of the situation.

This overview has three vectors – the situation on the battlefield, the corruption scandal rocking Kyiv, and the prospects for the success of the Trump peace plan.

The thread that connects these three vectors is the role of the Russian Federation and specter of Vladimir Putin.

Let’s look at these vectors separately and then unify them in the end.

On The Ground

The situation on the battlefield is straightforward. Russia is winning the war decisively and is now poised to take all Ukrainian territory east of the Dnipro River, the main waterway that divides east and west Ukraine.

The Donbas consists of two Russian-speaking provinces in eastern Ukraine called Donetsk and Luhansk. Russia has formally annexed the Donbas into the Russian Federation, although the Armed Forces of Ukraine (AFU) continue to fight to retain them. Russia has scored a series of key victories in Mariupol (2022), Bakhmut (2023) and Avdiivka (2024). A major AFU counteroffensive in 2024 failed totally.

U.S. and NATO weapons have been of no benefit to Ukraine. Armored vehicles including Abrams, Challenger and Leopard tanks and Bradley Fighting Vehicles have been left burning on the battlefield. Precision artillery has been made useless by the Russian ability to jam the GPS guidance systems. Ukraine’s initial advantage in drones has been crushed by Russia’s war mobilization and ability to produce thousands of drones per month.

F-16 fighter jets are shot down with ease by advanced Russian anti-aircraft systems. Patriot anti-missile systems are being blown-up by Russian hypersonic missiles that the west does not even possess. Ukraine has managed some attacks on Russian energy infrastructure inside Russia, but these have been no more than pinpricks and have been easily repaired. Meanwhile, the entire Ukrainian power grid has been severely degraded by Russian drones and missiles as bitter cold winter weather approaches.

Now, Russia has taken Pokrovsk, a medium-sized city in the Eastern Donbas closer to the Dnipro River. The significance of Pokrovsk is not its size, but its role as a major logistics hub for rail and road transportation. Pokrovsk is the distribution center for almost all AFU military operations in the Donbas region. Now, pockets of Ukrainian resistance in other cities such as Kramatorsk, Slovyansk and Lyman are without supplies of food and ammunition and are gradually being surrounded.

A Prelude to Victory. Pokrovsk is considered the gateway to Donbas and the key to allowing Russia to capture the rest of the region. When it was taken, it now gives Russia a new “jumping off” point into other major cities in the Donbas.

At the same time, the Russians have surrounded another major city in the north called Kup’yansk at the head of the Oskil River, not far from the provincial capital city of Kharkiv. Once Kup’yansk falls, the way will be open to surround Kharkiv. The Ukrainians have already stated to evacuate civilians from that city. These encirclement maneuvers are in addition to a major pincer movement in central Donbas focused on Kostyantynivka, Yablunivka and Toretsk.

The result is that the Russians are making major offensive moves in the north, central and southern areas of the Donbas and AFU positions are crumbling due to lack of food, ammunition and manpower. By this winter, there will be little standing in the way of a full-on Russian race to the Dnipro.

Beyond that, the Russians would look to the eventual taking of Kharkiv, Odessa and the portion of Kherson on the western bank of the Dnipro. Russian control of Donetsk, Luhansk, Zaporizhzhia, Kherson and the entire Black Sea coast of Ukraine would be complete. There would be nothing left of Ukraine except a landlocked rump state and the cities of Kyiv and Lviv.

Russian never wanted to conquer all of Ukraine. It wanted to secure the Russian-speaking areas and strategic points along the Dnipro River and the Black Sea Coast. With a much larger population, larger economy, better technology, full war mobilization, gold reserves, and the complete failure of Western economic sanctions, it is close to achieving those goals.

A Corrupt Kyiv

While Russia advances, Kyiv collapses politically. A major corruption scandal has emerged, implicating many of the top political leaders around the Ukrainian military dictator Zelensky. The accusations involve kickbacks and bribes from major Ukrainian energy companies.

This is the same racket that Hunter Biden and the Biden Crime Family conducted from 2014 to 2022, but on a larger scale. One key figure close to Zelensky has already fled to Israel (which has no extradition treaties). Zelensky’s top aide Andrii Yermak has recently resigned. All signs point to Zelensky himself being implicated in this scandal.

The only real scandal is why this current scandal wasn’t revealed earlier. This corruption has been going on in Ukraine for over thirty years. A lot of the corrupt money was being funneled back to the Democratic Party, which is why the U.S. never pursued the matter under Obama or Biden. When Trump tried raising the issue in 2019, he was impeached for just discussing it on the phone.

The implication is that the U.S. is now allowing the investigation to move forward because it’s time for Zelensky to move to one of his mansions in Miami, Dubai or Spain. The anti-corruption commission in Ukraine is controlled by U.S. appointees and funded with U.S. money. The message to Zelensky is to sign the Trump peace treaty or run for your life – perhaps both.

Three Choices for Trump

This brings us to the peace process currently underway. Top White House negotiator Steve Witkoff, aided by Jared Kushner and Secretary of State Marco Rubio, have just met with Putin in Moscow after discussions with Zelensky and NATO allies including the UK, France and Germany.

The Trump peace plan began a few weeks ago with 28-points. These points were narrowed down to 19-points after discussions with Zelensky. The exact text of this plan has never been revealed to the public and it is a work in progress.

In the main, we know it would cede the Donbas, Zaporizhzhia and Kherson to Russia up to the Dnipro River. Russia would give up a small patch of Ukrainian territory in the Sumy region, which was never on Russia’s list of goals. Russia would also give up its designs on Odessa. Ukraine would agree never to join NATO and maintain a kind of neutrality between east and west.

Russia’s list of demands to end the war has scarcely changed since before the war. It includes demilitarization, de-Nazification, neutrality, no NATO membership and protections for the Russian-speaking population. As Zelensky attacked the Russian Orthodox Church in Ukraine, Russia’s list expanded to include protections for the Church.

The biggest change in the Russian position has involved the annexation of Ukraine territory into the Russian Federation. Russia began the war with Crimea and quickly expanded its territory to include the Donbass. The longer the war lasts, the more territory Russia gains. There should be no expectation that Russia will return any of this land except Sumy. Today, Russia claims Ukrainian territory up to the Dnipro River that is has not yet occupied but expects to in the ongoing offensive.

The Russian position is very close to the original Trump 28-point plan – close enough to get a deal done. The problem is that NATO and Zelensky have changed the Trump deal in the last two weeks of negotiations. These changes include “boots on the ground” in the form of a peacekeeping force comprised of NATO troops and security guarantees that would oblige NATO members to come to the aid of Ukraine in the event the Russians engaged in future military action. Of course, Russian military action could easily be provoked by Ukrainian covert operations or drone attacks.

In short, the Ukrainian additions to the original peace plan amount to NATO status without formal NATO membership and lay the foundation for a new war. It would be the same package of lies the west has served up to Moscow in the Minsk I and Minsk II agreements, not to mention the Maidan “color revolution” in 2014 orchestrated by CIA, MI6 and Ukrainian Nazis.

Trump’s Choices. While the outcome is uncertain in the war, the timing is not. We’ll know within a week or two which way this is going. Russia wins in every scenario.

The Trump team is between a rock and a hard place. If they push the modified peace plan with the Ukrainian changes, Russia will say no. If they agree to the Russian position with slight concessions by Moscow, then Ukraine, France, Germany and the UK will say no.

Trump has three choices:

• The first is to stick with the modified plan, in which the case the war will drag on.

• The second is to agree to the Russian position and force Zelensky out of office in favor of a new leader who will agree. In that event, the war will end quickly. Western Europe doesn’t really matter in this scenario – they’re vassal states.

• The third is just to walk away; something Trump should have done last February when it was still Biden’s war. It’s not too late to do that, although Trump will be branded as a Putin Puppet by the DC warmongers.

My estimate is that the first scenario will play out.

But Trump has enormous capacity to surprise the world, so one cannot discard the second scenario. The third scenario seems unlikely because it’s a no-win for Trump politically, even though it would be the cleanest course militarily.

While the outcome is uncertain, the timing is not. We’ll know within a week or two which way this is going. Russia wins in every scenario. The only variables are the size and speed of the victory.

Tyler Durden Sun, 12/07/2025 - 08:10

Iran's Executions Reach Decade High

Iranian authorities have executed over 1,000 people between January and September 2025, the highest number of yearly death penalties conducted in Iran that Amnesty International has recorded in at least 15 years.

As Statista's Tristan Gaudiat shows in the chart below, within less than nine months, the number of people executed by the regime has already surpassed last year’s grim total of 972 executions.

You will find more infographics at Statista

These figures are likely low estimates due to the Iranian authorities not publishing such data publicly.

According to Amnesty, the Iranian regime has increased its use of the death penalty since the 2022 "Woman, Life, Freedom" movement uprising, as a tool of state repression and to crush dissent.

In 2025, the authorities have further intensified executions in the aftermath of the escalating hostilities between Israel and Iran, under the guise of national security.

Tyler Durden Sun, 12/07/2025 - 07:35

French Government Plan To 'Label' News Outlets Backfires Spectacularly

Via Remix News,

A few weeks back, French President Emmanuel Macron announced a new “media labeling” system, while also assuring citizens that this “media accreditation” will not include any sort of state-backed labeling. 

Suffice it to say, these assurances have only stoked fears of an authoritarian creep into the media sphere. 

Back in November, Macron had told La Voix du Nord that “a labeling process carried out by professionals” was in the works to highlight those media outlets that respected certain “ethical standards,” and thus also those it deems lacking.

Le Journal du Dimanche (JDD), owned by the conservative Bolloré group, denounced this development on its front page as a project for “information control,” reports France24.

Jordan Bardella, head of the right-wing National Rally, also posted on X about the news: ”The role of the State is not to “certify the truth” with an obscure label: it is to guarantee freedom of the press and freedom of expression. Let us reject Emmanuel Macron’s project, which is nothing less than to establish genuine control over information.”

Le rôle de l’État n’est pas de « certifier la vérité » avec un obscur label : il est de garantir la liberté de la presse et la liberté d’expression.

Refusons le projet d’Emmanuel Macron qui est d’instaurer, ni plus ni moins, un véritable contrôle de l’information. pic.twitter.com/ef0SnGiu1X

— Jordan Bardella (@J_Bardella) December 2, 2025

The Élysée posted itself in response to criticisms, with the message: “Pravda? Ministry of Truth? When talking about the fight against disinformation sparks disinformation…”

In response to this, Marion Marechal, president of Identity Liberty and niece of Marine Le Pen, noted, referencing Arcom, the French regulatory authority for audiovisual and digital communication.

“French people, rest assured, so it is therefore not the Élysée that will deliver the media truth label but a ‘Journalism Arcom,” held, once again, by socialists designated by the president?” she asked.

Bruno Retailleau, the leader of the Republicans, has now launched a petition entitled “Media: Yes to Freedom, No to Labeling!” which garnered over 40,000 signatures.

Éric Ciotti, now allied with the National Rally, published his own petition shortly thereafter, reaching the same number. 

Read more here...

Tyler Durden Sun, 12/07/2025 - 07:00