Most Americans Cite a Housing Affordability Crisis Nationwide and Close to Home

Filed in Economics, Home Building by on December 4, 2018 10 Comments

money house conceptNearly three out of four American households believe that the nation is suffering a housing affordability crisis, and a majority of respondents reported this is a problem at their local and state level as well, according to a new nationwide survey conducted on behalf of NAHB.

“These poll results confirm what builders from across the nation have been warning about — that housing affordability is an increasingly serious problem in communities across America,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “A mix of regulatory barriers, ill-considered public policy and challenging market conditions is driving up costs and making it increasingly difficult for builders to produce homes that are affordable to low- and moderate-income families.”

More than 2,200 adults were surveyed Nov. 27 through Nov. 30 to assess the public’s attitude on whether a lack of affordable housing is a problem in their neighborhoods, cities, states and nationwide. The poll cuts across partisan, regional, demographic and socio-economic lines. Among its key findings:

  • 73 percent of all respondents believe that a lack of affordable housing is a problem in the U.S.
  • 68 percent believe this is an issue in their state and 54 percent cite housing affordability as a concern in their neighborhood.
  • 58 percent said that if they decided to purchase a home in the near future, they would have trouble finding a home they could afford in their city or county.
  • Breaking down by community types, 68 percent reported a dearth of affordable housing as a problem in urban communities, 64 percent said it was an issue in middle-class neighborhoods and 56 percent cited a problem in rural areas.

In terms of strategies to improve the lack of affordable housing, 55 percent believe it would be effective for their city or county to lower development and construction fees builders must pay so that more affordable units can be built and 53 percent believe it would be effective to increase government subsidies to builders to produce more affordable units.

The poll is also consistent with the latest findings from NAHB’s Housing Trends Report for the third quarter of 2018, which finds that 79 percent of buyers say they can afford to purchase fewer than half of the homes available in their local markets.

Nearly a third of America’s 119 million households are cost burdened and pay more than 30 percent of their income for housing, according to NAHB analysis of data from the Census Bureau’s 2017 American Community Survey. That number includes almost half of the nation’s renter households and a quarter of the owner households.

Regulatory requirements alone account for about 25 percent of the cost of constructing a single-family home and roughly 30 percent of the cost of a multifamily unit. And every day, builders grapple with increasing construction material costs, a shortage of skilled workers and a dwindling supply of developed lots. Restrictive policies that limit or even prohibit various types of homes and make large areas off-limits to new construction contribute significantly to the problem.

“Housing is vital to the economic health of our nation,” said Noel. “This poll should serve as a wake-up call to policymakers at all levels of government to ease regulatory burdens that needlessly drive up the cost of housing and to enact policies that will encourage the production of badly-needed affordable housing units.”

This national online survey of 2,203 adults was conducted Nov. 27-30, 2018 by Morning Consult. It has a margin of error of ± 2 percent.

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  1. TP says:

    The poll should serve as a wake up call to employers that employee pay they hasn’t kept pace with inflation. Affordability isn’t about regulation, it’s about below average income.

    • Ron Jones says:

      I totally agree with you, TP, but that doesn’t support the monotonous association narrative which is designed to keep the members believing they have to be protected from the evil forces of regulations and rules. You just have to take this baloney with a grain of salt.

      • John Bitely says:

        I have been the housing industry for 30+ years and you can call it baloney if you want but the regulation for things that are overboard are amazing and people like yourself need to get educated on what these are because otherwise those of us building homes will just keep passing on the costs to the buyers. Cost has to pass through on the building of a home.

  2. Charles Schickley says:

    Education, Education, Education. No, you cannot afford to buy a home choosing a career as a McDonald’s cashier. That being said the DOL is doing a poor job of directing people to in demand trades asn schools.

  3. jackie cure says:

    And lets not forget land values rising exponentially.

  4. Steve says:

    You cannot overlook the rising interest cost and tariffs from your narrative. Bank credit ratios for mortgage payments are directly limited by Fed fund spikes; tariffs on Asian imported building materials directly effect housing cost. Once again, our government regulatory policy is placing our industry in the cross hair of a housing industry meltdown! Sound familiar?

  5. Larry H says:

    After the 2008 crash, large institutional investors like Berkshire and other REITs started buying residential properties across the nation. This shift from individual investors buying, holding and renting properties has greatly changed the economics of housing. Most individual investors were satisfied with tenants who paid fixed 30 year mortgages and maintenance costs as the landlord accrued the appreciation with an occasional rent increase.

    Large institutional investors are driven by annualized gains and will rapidly drive rents higher and higher. REITs are expected to return more than 12% and wages are increasing less than 3% annually, so this is bound to get much worse for renters in the next few years.

    Ultimately the REIT market will collapse just like the last time wall street stole our retirement savings and our house appreciation. As the money managers get richer, we savers, homeowners and taxpayers get poorer…

    • Rob Wade says:

      Larry H.. is talking about the Elephant in the room nobody want’s to address.. When large banks and Investors create a crisis, lots of individuals cannot keep up or weather the storm to the next cycle. They lose things… Then those same Large banks and Investors come in and snap up all the lower valued properties.. so they can resell and start the process all over again.. in effect stealing the wealth of everyday Americans with a fantastic plan worked out buy the financial elites.. long long ago..

  6. Bill Beeson says:

    A major housing cost is with city & state fees. Outrageous cost.
    Please work to privatize plan check and any related government jurisdictions.
    With government comes delay and cost.
    The government employ gets a check whether the produce anything and I feel don’t care. They often make producing housing very difficult.

  7. Duane T says:

    How much of home building cost is directly related to fees, taxation, and regulation? The stuff that does not buy one stick of lumber or drive one nail? How does that compare to ,say, 40 years ago? In my area, Chesapeake Baywatch has contributed many thousands of dollars increase to ANY land improvement.And that is only one set of regulations driving up the cost of building. All costs WILL be passed on to the buyers.
    Always.

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