There’s a climatic scene in the Matrix series of films in which Agent Smith tells Neo that everything in the universe moves under one core principal: Every cause has its effect. It's a truism that can be felt acutely as well as broadly. That globalization is impacting housing is the latter, and I'll explain why.

The housing market – and its inability to grab first-time homebuyers or a new generation of borrowers – is no exception to this harsh rule. But there's no Neo to pull Realtors, agents, lenders and an entire industry out of this economic malaise, barring a miracle.

Yes, there are gains from the Fed juicing the system and from wealth already built into the system, but a new report on globalization and it’s ‘effect’ on U.S. economics quietly sends a chilling message to the market. That message being the average American, especially of the younger generation, can no longer afford many items, including houses.  

Paul Ashworth, an economist with Capital Economics, released a report Monday on income inequality. While the report skips housing as a topic altogether, it does try to explain some of the economic headwinds that have held a few generations of Americans hostage, making it unlikely that they will have the spending power to keep the housing markets fueled to the delight of realtors and the mortgage markets in the years to come.

Ashworth writes, “The rise in income inequality may not be morally defensible or socially desirable but, for now at least, it doesn’t appear to be restraining economic growth.” And no he is not an Occupy Wall Street type. He's talking less about punitive interplays between the classes and more about the overall effect of globalization, or what may commonly be called the offshoring of jobs.

He notes that real incomes for Americans have been stagnant since the 1970s, which makes it more unlikely that troubles in the mortgage industry were the key cause of the housing downturn. (This may be good news if you believe the industry unfairly took all the blame)

As to what is causing economic stagnation? Some have blamed the Fed, Congress, not enough taxation, Republicans, Democrats and social decay, such as a lack of morals or work ethic.

But Ashworth cuts to the chase. Why are Americans not buying large-scale goods? Why is malaise common and not going away?

"Globalization appears to be the primary cause of the stagnation in real incomes in the bottom half of the distribution," he writes. "The offshoring of relatively low-skilled labour-intensive manufacturing jobs matters because those jobs were, in general, better paid than the new jobs requiring relatively few skills that are being created in the education, health care and leisure sectors."

Yet, Ashworth is not convinced income equality is holding back the economy. In fact, he says it’s not.

Globalization worldwide has reduced income equality between developed and developing nations – a point often used to defend globalization, based on Ashworth’s findings.

However, it has increased  income inequality in America, and it’s Americans who U.S. Realtors, agents and the housing industry serve and base their livings off of. So what happens when Americans en masse end up with less to spend?

Ashworth’s report remains somewhat neutral in answering these questions. He seems afraid to pin the blame on one part of the economy. But for the mortgage industry, his findings are interesting since he is more likely to blame boom-bust cycles on macroeconomic issues rather than individual industries.

As he views the 2008 financial crisis through his data, he notes more Americans making less after globalization ended up taking on more debt to achieve goals like homeownership.  As those debts grew too high, they ended up struggling under it all, triggering a financial crisis that shook multiple industries.

In Ashworth’s own words:

“Are inequality and the financial crisis linked? A number of people have also attempted to blame  the rise in income inequality for the financial crisis  and, consequently, the severe recession in 2008/2009 and the economy's subsequent weak  performance. One theory suggests that the stagnation in the incomes of those at the lower end  of the income distribution forced them to borrow heavily, which eventually triggered the financial crisis as subprime loan default rates surged.”

Unconsciously Ashworth does two things: he kills the assertion that the mortgage industry alone created a spiraling economy with its practices, while exposing the hidden elephant in the room -- the fact that offshoring, which is favored by both political parties, undercut economic growth leading to more economic strife. If you sell houses, who do you sell to in this kind of world?

Anthony Sanders, a professor of finance at George Mason University, sees a similar trend. He notes that when Fed Chair nominee Janet Yellen steps in front of Congress, lawmakers will ask whether she is worried QE infinitiy will lead to inflation. But Sanders notes, inflation is well below 2% despite aggressive Fed intervention because economic growth is weak.

The cause? "We still have median household income falling in the U.S.," he says. "As long as real incomes keep falling, we are not going to have the growth you need to generate inflation." He notes that banks are not lending, and most of the most recent lending is for subprime auto loans, not mortgages, which used to be the driver.

Sanders suggested globalization and the offshoring of jobs led to cheaper, less expensive goods but at the expense of jobs that supported other aspects of the American economy.

So at this point worrying about inflation at Yellen's hearing is meaningless, he says. Without economic growth, that is just not going to happen right now.