A recent survey by the Pew Research Center found that 49 percent of Americans believe housing affordability is a significant problem in their community.
Pew’s American Trends Panel conducted the survey. More than 10,000 adults across the U.S. are on the panel. Each panelist has participated in previous Pew surveys, which allows the researchers to “build a much richer portrait of the public than is feasible in a single survey interview.”
Overall, the survey found that the number of Americans who believe housing affordability is an issue has grown by 10 percent over the last four years. It also found that 70 percent of Americans believe that younger generations have a more challenging time purchasing homes than previous generations.
The survey also showed that various factors contribute to the decreasing homebuying sentiment. Here are some of the survey’s findings.
Limited Housing Supply Is Pushing Many Young Homebuyers Out of the Market
Local housing markets are facing inventory shortages across the country. These shortages have caused median home prices to surge, according to data from the Federal Reserve Bank of St. Louis.
As of February, the U.S. housing market had 6.3 months of supply, representing more than 370,000 homes for sale. While this total was the highest recorded since September 2021, the total housing inventory has fallen by more than 74 percent year-over-year.
The drop in total available inventory has also caused home prices to rise. This makes it harder for younger homebuyers to find a starter property. The Federal Reserve also estimates that the national median sales price for homes is up to $408,000 as of 2021. This represents an annualized price appreciation of more than 13 percent.
Housing Availability Is Nearly Non-Existent
The number of homes available for sale has dropped so precipitously because the pandemic created a surge in homebuying activity. A recent Pew analysis found that there were 2.1 million more homeowners at the end of 2020 than at the beginning of the year. This speaks to the demand for non-congregate shelters created by COVID-19.
In 2020, the U.S. homeownership rate increased by 0.7 percent to 65.8 percent. Pew described this change as “a large year-over-year change”. However, the overall homeownership rate is still below the all-time high of 69.4 percent measured in 2004. This homeownership rate has also remained sticky over the past five quarters. This speaks to the lack of available housing inventory.
But the homebuying surge didn’t impact every community in the same way. Pew found a racial disparity among homebuyers. For instance, White Americans were the only racial or ethnic group in the survey to experience a statistically significant increase in their homeownership rate. Pew said this speaks to the “disparities in homeownership [that] have persisted over decades.”
More Renters Are Becoming Housing Burdened
Another factor that the survey found to be contributing to the nation’s housing affordability struggles is that more renters report paying 30 percent or more of their income on housing expenses. This is more commonly known as being “cost-burdened,” according to the Department of Housing and Urban Development.
Using data from the Census Bureau’s latest American Community Survey, the survey found that more than 46 percent of renters are paying at least 30 percent of their income on housing expenses. That includes 23 percent that pays 50 percent of their income or more.
These surging rents also put millions of renters at risk of experiencing homelessness. For example, cities like Riverside, California; Tampa Bay, Florida; and Memphis, Tennessee led the country with greater than 25 percent rent increases in 2021, according to data from Realtor.com. These states also contain more than 168,000 people experiencing homelessness, or 25 percent of the nation’s total.
To alleviate the struggles that renters face, more than 77 percent of homeowners and renters support adding accessory dwelling units, duplexes, and triplexes to residential neighborhoods.
“We are facing a housing crisis that’s touched most communities across the country, pushing housing affordability to the center of the conversation for many,” said Manny Garcia, a population scientist at Zillow.
How You Can Help
The pandemic proved that we need to rethink housing in the U.S. It also showed that providing additional support and protections for renters is a clear-cut way to reduce future increases in homelessness.
That’s why we need you to contact your officials and representatives. Tell them you support keeping many of the pandemic-related aid programs in place for future use. They have proven effective at keeping people housed, which is the first step to ending homelessness once and for all.