Prominent investor Peter Schiff has sparked controversy by suggesting that married women entering the workforce are partly to blame for the country’s housing crisis. Schiff made the comment in a post on X (formerly Twitter) on August 6, where he discussed the rise in mortgage rates over the years. He argued that 40 years of declining mortgage rates, coupled with the increase of married women in the workforce, led to skyrocketing home prices that outpaced income growth.
Schiff’s statement received strong backlash from X users, who criticized him for blaming women for a societal issue. One user sarcastically replied, “Of course it’s the women’s fault. Nice Peter.” Another pointed out that Schiff’s view disregarded the struggles and progress made by women in breaking the glass ceiling and advancing in the workplace.
In response to the criticism, Schiff clarified his statement, explaining that he did not mean to blame women for rising home prices. Instead, he emphasized that inflation was the main driver behind the housing crisis. Schiff highlighted that the extreme inflation experienced in the late 1970s and early 1980s forced more women to enter the workforce to compensate for reduced real earnings due to rising taxes and inflation.
Schiff’s argument is supported by historical context. In the 1980s, mortgage rates reached a record high of 18.45%, driven by inflation caused by rising oil prices, government overspending, and increased wages. This inflation made housing, among other things, more expensive. As a result, more women sought employment to afford the rising costs of homes, aided by programs like the 1973 Comprehensive Employment and Training Act, employer-sponsored day care, and paid family leave.
The current housing affordability crisis is a result of various factors. During the pandemic, record-low mortgage rates, accommodative monetary policies, and remote working trends led to a surge in demand for homes. However, disruptions to supply chains and labor pools reduced the supply of new housing. As a result, home prices soared, exacerbating the affordability issue. Additionally, other costs associated with homeownership, such as maintenance, insurance, and property taxes, have also increased.
Schiff predicts that these trends will continue until inflation and interest rates cool down. He anticipates that affordability challenges will persist and potentially worsen in the coming years. Experts are concerned that the combination of rising mortgage rates and limited housing supply may have a detrimental impact on the housing market.
In conclusion, while Schiff’s statement about married women entering the workforce contributing to the housing crisis received criticism, his intention was to highlight the correlation between inflation and rising home prices. The current housing affordability crisis is driven by a complex mix of factors, including low housing supply and increased costs.