👋 It's all about economic vibes going into the 2024 election season — which officially kicks off next week with the Iowa caucuses. So today, we introduce the first of a series of surveys that seeks to take the temperature of the American public: the Axios Vibes survey by The Harris Poll.

  • ICYMI: The bitcoin ETF saga. (Axios)

Today's newsletter is 942 words, 4 minutes.

1 big thing: Renters vs. owners

Data: Moody's Analytics; Chart: Axios Visuals

Renters are among the most likely to describe their current financial situation as poor, while homeowners have a rosier take, according to the Axios Vibes survey by The Harris Poll, Emily writes.

Why it matters: Americans who rent their home have been through the wringer over the past few years, dealing with double-digit rent increases, while soaring home prices and mortgage rates pushed homeownership increasingly out of reach.

By the numbers: 57% of renters in our poll described their current financial situation as "poor," compared with just 29% of homeowners.

  • Homeowners are nearly twice as likely to say they're getting ahead financially, compared to renters.
  • Nearly half of all renters (46%) said they didn't have the money at the time a bill was due over the past month compared to 29% of homeowners.
  • How they did it: The survey's findings were based on a nationally representative sample of 2,120 U.S. adults conducted online between Dec. 15-17, 2023. (More on the methodology.)

The big picture: The median asking rent in the U.S. is up 40% from the first quarter of 2020 — i.e., before the pandemic — according to the latest census data from the third quarter of 2023. In some regions, increases were higher.

  • Wages did not keep up. Average hourly earnings rose 20% from February 2020 to December 2023, per government data.

Key stat: In 2022, Americans crossed the "rent burdened" threshold — meaning the share of a typical household income needed to rent an average-price apartment went above 30%, per Moody's. (See the chart above.)

  • Last year, as income growth picked up and rent increases slowed, things improved — but only a smidge, leaving renters still burdened.

On the flip side: Homeowners were in a different boat. The value of their homes soared, while their monthly mortgage payments mostly did not.

  • The average rate on all the existing mortgages Americans hold right now is 3.5%, according to Moody's chief economist Mark Zandi. That's around half the going rate for a new mortgage.

The upshot: "Renters have a very thin financial buffer," said Lu Chen, a senior economist at Moody's. "While homeowners continue to build their wealth."

2. Post-COVID vs. post-financial crisis

Data: American Bankruptcy Institute; Chart: Axios Visuals

The rent versus own dynamic is markedly different from what happened after the 2008 financial crisis, Axios' Kate Marino writes.

Flashback: Back then, rents held fairly steady while home prices plummeted — putting a lot of mortgage holders underwater on their loans (owing more to the bank than their house was worth) and in precarious financial shape.

  • But it was a decent time to buy a house for renters. The government even gave first-time buyers a $7,500 tax credit for the down payment.

In 2010, coming out of the crisis, homeowners made up 54% of individual bankruptcy filings (known as Chapter 7s), according to the American Bankruptcy Institute.

  • Fast-forward to 2023: Homeowners were just 23.4% of bankruptcies — even though they made up 66% of the population.

What they're saying: "Right now, consumer bankruptcy is mostly about renters. They're three or four times as likely to file a case as a homeowner," says Ed Flynn, consultant at ABI.

3. Foreclosure rates are still pretty low

Data: ATTOM; Note: Homes in foreclosure include those with default notices, scheduled auctions, or that have been repossessed by the bank; Chart: Axios Visuals

The share of U.S. homes in foreclosure ticked up a bit in 2023 — but it's still lower than it was in 2019 before the pandemic, according to new data from ATTOM, Emily writes.

The big picture: Because of pandemic-era support, foreclosure rates plummeted in 2020 and 2021.

  • Low unemployment rates and soaring home prices helped keep them low.
  • There just aren't many distressed homeowners out there who can't find a buyer for their house — and very few U.S. homes have underwater mortgages.

By the numbers: In 2023, foreclosures were up 10% from that low 2022 baseline.

  • The share of U.S. homes in some state of foreclosure was just 0.26% last year. That's still lower than in 2019 (0.36%), and well below the post-financial crisis peak in 2010 (2.23%).

The bottom line: "[W]e see the recent rise in foreclosure activity as a market correction rather than a cause for alarm," said ATTOM chief executive Rob Barber, in a release. "It signals a return to more traditional patterns after years of volatility."

4. What happened in Minneapolis

Illustration: Annelise Capossela/Axios

One city has done a better job at taming rising rents than most: Minneapolis.

  • Now, the city's housing policies could be a blueprint for others, Axios Twin Cities co-author Nick Halter writes.

The big picture: Minneapolis' development reforms — which have largely amounted to a let 'em build approach — have worked, according to Pew Charitable Trust researchers.

Zoom in: Rents in the city have increased by only 1% between 2017 and 2022, in large part because developers have increased housing stock by 12% during those five years, according to the report.

  • Meanwhile, rents in the rest of the state, which only increased its housing stock by 4%, have increased by 14% over the same period.

What they found: Pew identified a handful of policy changes that have helped increase housing stock.

  • Minneapolis eliminated parking minimums for new buildings over the past 15 years. Underground parking can cost up to $50,000 per space, making housing more expensive to build. (Loyal readers of Axios Markets know that Emily wrote about the parking issue last June.)
  • The city also required minimum density and height in certain areas, like downtown.

What they're saying: Pew housing expert Alex Horowitz told Axios that cities like Austin, Texas, and Charlotte, North Carolina, have already followed Minneapolis' lead.

Read the full story

5. Catch up quick

💻 Google eliminates jobs in engineering and other divisions. (NYT)

🤝 Chesapeake Energy and Southwestern Energy agree to a $7.4 billion merger. (WSJ)

⚕️A record 20 million Americans sign up for health insurance via Affordable Care Act marketplaces. (AP)

Editor's note: Yesterday's story on U.S. households' stock holdings was corrected to reflect that it is 93% of their stock market wealth (not 93% of the stock market) that is held by the wealthiest 10% of those households.

🙏 Thanks to an alert reader for pointing out the error.

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Axios Markets is edited by Kate Marino and copy edited by Mickey Meece.