Fast Fact: Growing housing affordability challenges are unraveling the American Dream for millions. Even those who can afford a home won’t be immune to the impacts.
Over the past few years, home values have been rising faster than wages in over two-thirds of U.S. real estate markets.
At this point, over 60 million Americans now live in areas where housing is deemed unaffordable.
Incredibly, over 25 million of us live in areas where home prices are now less affordable than they were at the peak of the real estate bubble.
America’s affordable workforce and entry level housing shortage is getting worse, not better. New home construction slowed significantly over the past few years and remains sluggish. Of those homes that are being built, only about 20% are affordable. And our government is losing an estimated 10,000 affordable rental housing units each year thanks to a $25 billion maintenance and repair deficit.
When average working folks and potential first time home buyers can’t find an affordable home to purchase, the repercussions begin to ripple into their family and broader community:
- Commute times lengthen leading to latch key kids, fast food dinners, highway congestion and expanded carbon footprints.
- Housing challenges cause kids to enter and exit schools throughout the year, impacting entire classrooms.
- Many are forced to pay rising rents, meaning less consumer spending to support the local economy.
- Employers find hiring qualified local labor increasingly difficult.
- Saving for a down payment and, later, retirement, becomes increasingly difficult.
- Housing disparity only widens the already growing economic gap Americans are experienced today.
And it’s not only our country. Affordable workforce and entry level housing is a growing challenge around the world. The World Bank and United Nations now track global housing affordability.
In Western Australia, governments are experimenting with programs sharing home equity-appreciation, grants for first time buyers and government funded down payment savings accounts.
The Chinese government has tried a variety of incentives for developers and home buyers alike.
India is facing an estimated 18 million affordable housing unit deficit.
Here in the U.S., our federal, state and local governments have been using tax credits, reduced rate loans, down payment assistance and a variety of other tools to help bridge this growing housing gap with limited success.