real money. The bad news, homes are becoming less affordable. I want to talk to you about Home Affordability. The most important factor in the equation is your income. The next is the actual price of the home. The mortgage, not just the rate but how much it is going to be. You figure that out by calculating what percentage of your income will go to your mortgage payment on a monthly basis. The National Association of realtors take all those factors into account in its monthly Home Affordability index. This is the way its look like in the last year. It shows nationwide, affordability has come down from last august to this august. That means more americans who have good credit, 20 down who qualify for a 30 year fixed Rate Mortgage cant afford to buy a home where they live. The obvious culprits are rising home prices and higher Mortgage Rates. Now not all markets are the same. Real estate is always local and trulia a real estate Mortgage Firm has crunched numbers for 99 markets across the country. Those figures show california, massachusetts, new york even austin, texas are pricing out middle class buyers. 50 of the houses for sale are beyond the reach of americas middle class and that is a worrying trend. Jud kulco is joining me now, on why owning a home is less of a reality for middle class americans. Jud good to see you. Lets use boston as an example. A year ago, more than half the homes in boston were affordable according to this measure. Now its down to about a third . Its fallen for two reasons, home prices are up and Mortgage Rates are higher than they were a year ago. Even though rates have come down a little bit, we saw a big spike in Mortgage Rates in may and june. A lot of that had to do with expectations about what the fed would do. Now all bets are off in terms of what the rest of the government would do with housing. But thats what sent rates up. That all considered, that means homes are less affordable to buy in pretty much he everywhere in the country. What does that mean economically . It means that the rich can buy homes and others get sort of priced out . It means that the rich can buy homes. Lots of people who cant afford to buy are either representing or theyre looking for smaller places. Many are doubling up. As part of this recession we saw more young people still living with their parents, or with roommates more than they did before the recession. Affordability is a big driver that explains why people move from some parts of the country to another. In california for instance where housing is one of the most expensive places in the country we see lots of people moving from california elsewhere and its most reply lower and middle income people who are leaving california typically for places where housing is a lot more affordable. Economically, thats weird, you end up with centers where housing is more expensive and people cant afford to live there and it forms a mix of society, prior to 2007, 2006, it was worse. People who didnt have a higher income couldnt get affordability in a lot of places. Thats right. Even though affordability has declined over the past year, housing still looks more affordable today than it did during the bubble. Thats because prices are still lower than today and Mortgage Rates even though theyve gone up from a year ago are still much lower. Remember rates were in the 6s during the real estate bubble. Thats the high 98. During the 90s they were in the 6s and 7s and some remember double digit rates in the 80s. Theres more to it when it comes to affordability. The idea of space, the amount of space you get in an affordable home in places like San Francisco and new york very different from cincinnati or atlanta for instance. Thats right. The typical home, looking at homes that are affordable to the lower middle class, the affordable home could be 1500 square feet, that is a good sized two or even three bedroom house in the midwest like cincinnati. Affordable homes may be only 1,000 square feet in San Francisco or even less in atlanta. Its an are interesting metric jed. Good to see you here. Jed kulko, chief economist at trulia. Currently building two custom made homes and four town houses. Charles good to see you. How is business for you . Great, couldnt be better. On. Were talking about Housing Affordability situation, youre seeing Interest Rates rising a little bit and where are prices going where you are . Prices keep going up. You see it really every spring they kind of go up a little bit more. Things are just things have been really good in houston and you know i have to attribute a lot of it to the Energy Industry here. Youve got allot of young people moving into houston every week. So its just you know things could not be better. Its just its a great economy, right now you try and get land as builders you try and find lots and you cant even get them because there are so many people competing for them. A lot of them are cash buyers. Cash speaks louder than borrowing money. Are you worried about sustainability of this business . While its going well youre not asking questions . You know a little bit of both. You always worry about when its going to stop. I mean we saw in 2008, somebody put the brakes on and we all flew out of the car. But you know we always worry about it as builders. Weve got a lot of money out there on the line and you get too much out there you get in trouble when somebody hits the brakes. So we always worry about it but i think its got a little bit of time left. Who knows how long . But things are going really well right now. You know we see this Mortgage Rate increase, we see a bunch of things going on in the economy but were still hearing that housing is strong. Whats your sense of the market . I know you dont have a whole lot in process but is housing stronger or weaker . Its much stronger. I think every year we had a reblild from 2008 to maybe around with 2010, 2011 and then it just took off. It seems every year we see large jumps, percentage jumps in real estate and you know, the price of the homes, when we do speculative homes you see the price of the speculative home jump quite a bit from one year to the next. As far as new construction its very difficult to get say a town home under contract. They go very quickly. So were seeing things increase, every year. And id see it Getting Better in 2014. Beyond that i dont know whats going ohappen but i do know that next year looks like its going to be a strong year again. Typically of contractors, its you or your brother who are the owners and the employees really the only two staff of the company. Right. As your business ebbs and flows, you hire contractors. Right. We keep it lean. We dont like to keep a lot of glows open the payroll. Everything is we use subcontractors for what we do. And its just easier to manage it for us. And do you have enough workers . Absolutely. You know i will say this our workers have been with us for many years. Probably most of our subs have been with us for ten years so it makes it easier. But we are seeing our supply is making it much more difficult to get things delivered. Lumber, windows, doors, roofing materials stuff like that because so many people are building right now. Wow. And it used to be you would call a rep from a lumber company and they would call you right back and now they call you back in two days. Well may business continue to be as well as it is for you now. Ill have to visit and see how its doing. Builder of custom homes in houston. The slow down in refinancing applications is taking its toll. Bank of america is cutting 3,000 mortgage related positions by the end of the year. The cuts will likely hit new york and california. B of a is not the only. Higher Mortgage Rates have led to fewer refinance applications and is leading to a mortgage industry that is shrinking. More than 60 billion pay for it for a look at Social Security, what any of us are willing to take the bitter medicine. Every morning from 6 to 10am Al Jazeera America brings you more us and global news than any other American News channel. Find out what happened and what to expect. Start every morning, every day, 6am to 10 eastern with Al Jazeera America. All next week america tonight investigates the campus rape crisis. Serial rape is the norm on college campuses. I know that when i did report, i was blamed. Then on friday, november 1st at nine eastern, we open up the conversation in a live townhall event. Sex crimes on campus, a special week of coverage and live townhall on america tonight nine eastern. Only on Al Jazeera America. vo Al Jazeera America we understand that every news story begins and ends with people. The efforts are focused on rescuing stranded residents. vo we pursue that story beyond the headline, past the spokesperson, to the streets. Thousands of riot Police Deployed across the capitol. vo we put all of our Global Resources behind every story. It is a scene of utter devastation. vo and follow it no matter where it leads, all the way to you. Al jazeera america. Take a new look at news. Polls show that a majorities of americans are afraid that Social Security is headed towards a crisis and that action has to be taken. Most politicians though say that making changes to Social Security is political suicide. But solving our budget something has got to give. Loosely taken, you could break the budget into almost three equal quarters, one is the military, the Fourth Quarter is everything else. Lets look closer though at Social Security. Nearly 60 million americans get Social Security checks every month but this social insurance also cost taxpayers hundreds of billions of dollars in year. We need to figure out how to pay for it. Ill tray 00 look at that in a minute. However, duarte looks at Social Security. Social security was born during the Great Depression where millions of americans, especially Senior Citizens were living in poverty. It was designed to meet their basic needs. Today nearly 40 million workers and their dependents, about 11 million disabled workers and their dependents get 1129 dollars in all. 816 billion in Social Security benefits were paid out last fiscal year. To pay for that, 6. 2 of every dollar American Workers earn is dropped into a pot to fund Social Security. Employers add an equal amount. That combined with Interest Income is how the pot is filled. Here is the problem. The wave of baby boomers tapping into benefits means the Social Security trust fund wont have enough money by 2033. According to the Economic Policy institute. After that period, we wont have quite enough money coming in through current payroll taxes to pay for scheduled benefits. Well have about enough to cover about 77 of scheduled benefits. But that would still be a big cut in benefits if nothing were done in advance. The solutions to the Social Security problem include raising taxes taxing what more wealthy people earn or raising benefits, another idea, raising the time when people can take benefits. The problem, none of those solutions are popular. Would you take reduced Social Security benefits at 62 years old . Or the full amount at 70 . Season 01 said i would take reduced at 62 and still work part time as allowed. I would enjoy it more than waiting. John bollinger says, i will work as long as possible and go for the max. Tell me what you think by tweeting me ali velshi. None of the solutions to solve the problems of Social Security going broke 20 years from now are popular with voters. Firming Social Security isnt sexy perhaps we the people are partially to blame for an ailing Social Security system. At least thats view of david leon hart, an author of an excellent short ebook that you should read called heres the deal, that explains entitlements better than ive ever heard. A quote from your book, i want to read it to my viewers. Eventually the country will have to confront the deficit you we have rather than the deficit we imagine. The one we imagine is a deficit caused by waste, fraud, abuse, foreign aid, Oil Industry Subsidies and vague out of control spending. The one we have is caused by the worlds highest health costs by far, the Worlds Largest military by far, the Social Security benefit that was created when most people died at the age of 70. The book talks about these entitlements, two areas that americans dont want to give up and two areas politicians treat as third rail. So what are we supposed to do about it . Well, the good news and thank you. The good news is, this isnt an emergency today. The deficits coming down fairly rapidly. It is getting below the point where its some sort of emergency. The rest of the world remains very happy to lend money to the united states. So we have some time to deal with this long term deficit. The bad news is that i dont think theres a huge amount of realism about what has caused it. I think most people like to think about the idea that the other people has paid too little, getting too much. The fact is that as a society were not taxing ourselves for the benefits weve promised ourselves. The solution is bringing down benefits or bringing up taxes. People dont love this. By the way, the tweets will start coming in. I called Social Security entitlement. What is the answer to that . Thats a term. There is no scientific answer to that. People can debate that. While Social Security isnt creating any of our problems, in the long term it will cause very big problems for our finances. It is not set up in a way that it is sustainable. The fixes are not radical. You could do any number of tweaks to the tax rate or to the benefits. You could increase the tax rate, you could increase the tax rate for high income people, you could decrease benefits, you could decrease benefits just for high income people. The only way to keep it going would be for it to be a drain on the rest of the federal budget. I dont think youve got a dog in this fight any different than anybody who pace taxes has a dog in this fight. We are generally speaking net takers meaning we take out of these programs generally more than we put in. Most people think its not the case. In your book you use an example of two married retirees with typical earnings paying about 88,000 into these programs but receiving three times the amount in benefits, more than 380,000 in benefits. The example could be anybody watching this show here. Thats right. People basically pay for themselves in terms of Social Security. But the issue is really medicare. Look, obviously someone who pairs into the medicare system their whole life and say dies at 66 pays for themselves about the the average person doesnt come close to paying for them sesms. That is contrary to particular belief. Hey, i simply take out what i put in. But the answer is you are not. We have the worlds most Expensive Health care system as a result you get in terms of dollar value then you put in. David always a pleasure to talk to you. Thank you for enlightening us. David is the author of an ebook called heres the deal. Now we know what twitter thinks twitter is worth. Well give you the latest details about the ipo and how the company that may tweet more than a bird sound, will become a grown up business. How old are you . Nine. How old were you when you first started working out here . Seven. Fault lines how children are hired by Us Agriculture to help put food on americas tables. In any other industry kids need to be 16 years old to be able to work. You dont see any of that in agriculture. They dont ask, is she 12 . They just want their job done. How many of you get up before 5 oclock in the morning . On august 20th, al j well, twitter is another step towards becoming a public company. 70 million shares at a price between 17 and 20 appease. Thats a deal near 1. 4 billion, the largest ipo since facebook. Because all the shares in the company will not be available to the public. Enough about numbers. Vivian shill err will run twitters news and journalist partnerships, one that you wouldnt expect existed. What is twitter up to, jeff covers media and tech and joins us via skype. She is an nbc executive, she headed npr before this, she was at cnn before that. Whats twitter doing with that . Well twitter has increasingly over the last few years making their partnerships with media companies, Media Outlets a bigger and bigger strategy. The idea is to integrate those services. A lot of which as you importanted out she already has experience with and basically get them to integrate twitter in all kinds of ways. News gathering, actually using twitter as a reporting tool to using twitter to distribute their news to readers, to as you do doing onair polls, things like that. We definitely use it, theres no question that journalists have begun to use twitter, breaking news it helps you sometimes it hurts you but i can help you confirm stories. How does this all re