{"id":77802,"date":"2022-09-03T19:06:00","date_gmt":"2022-09-03T23:06:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=77802"},"modified":"2022-09-09T11:56:34","modified_gmt":"2022-09-09T15:56:34","slug":"unaffordable-housing","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/unaffordable-housing\/","title":{"rendered":"Is Unaffordable Housing the Next Post-Pandemic Crisis?"},"content":{"rendered":"\n

What’s causing unaffordable housing? Why could this issue be reaching a crisis point?<\/p>\n\n\n\n

The post-pandemic economy<\/a> is splitting into two tracks. There’s one filled with those who\u2019ve built up savings through the pandemic and are fueling a superheated housing market<\/a>, and another with those who are increasingly priced out of affordable housing.<\/p>\n\n\n\n

Read on to learn why housing is becoming increasingly unaffordable, according to economists.<\/p>\n\n\n\n\n\n\n\n

The Unaffordable Housing Crisis<\/h2>\n\n\n\n

Headlines have focused on the superheated housing market and the all-cash, inspection-free purchases it\u2019s inspiring. Less attention has been given to the other end of the market\u2014unaffordable housing.<\/strong> A large swath of the population has been priced out of the housing frenzy. <\/p>\n\n\n\n

For these people, for whom the pandemic meant lost wages instead of bulked-up bank accounts, the problem isn\u2019t how to outbid the next guy, but instead, how to pay for next month\u2019s rent.<\/strong> Many spent their stimulus payments on rent and even with that help, often avoided eviction only because a federal moratorium prevented it. <\/p>\n\n\n\n

Now, however, moratoriums are ending, stimulus payments are spent, and unemployment benefits have expired. Facing unaffordable housing and rental prices, many are also facing evictions and foreclosures. <\/strong>Their struggles hint at a growing affordability crisis in housing for both home purchases and rentals that, if not addressed, may become a significant drag on the economy as a whole. <\/p>\n\n\n\n

High Demand, Low Supply<\/h3>\n\n\n\n

The primary cause of unaffordable housing is high demand coupled with low supply. Demand has been driven by several factors: The pandemic prompted a rush to upsize homes as people hunkered down in them, prompting a wave of new home-seekers. Millennials entered prime homebuying years, and the pandemic accelerated their age-appropriate desire to settle down. Low interest rates fueled easy mortgage payments. As a result, the homebuying rate is on track to surpass that at the peak of the housing boom in 2006.<\/strong><\/p>\n\n\n\n

Tight supply is a result of a decade of lower building rates, leading to increasingly more unaffordable housing. After being burned in the Great Recession of 2009, many home builders strategically decreased their output. <\/strong>Although building ramped up in 2020 in response to increased demand, builders then faced pandemic-induced shortages of materials and labor\u2014more than 90% reported shortages of appliances and lumber in May of 2021. This affected all types of home building: single-family, multifamily, affordable, and market rate. <\/p>\n\n\n\n

Additionally, the inventory of available existing<\/em> homes has shrunk:<\/strong> Between March 2020 and March 2021, it decreased by 30% as homeowners who might have considered listing their homes decided instead to stay put, reluctant to compete with so many others for their next house.<\/p>\n","protected":false},"excerpt":{"rendered":"

What’s causing unaffordable housing? Why could this issue be reaching a crisis point? The post-pandemic economy is splitting into two tracks. There’s one filled with those who\u2019ve built up savings through the pandemic and are fueling a superheated housing market, and another with those who are increasingly priced out of affordable housing. Read on to learn why housing is becoming increasingly unaffordable, according to economists.<\/p>\n","protected":false},"author":19,"featured_media":77817,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[81,31,24],"tags":[727],"class_list":["post-77802","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","category-money","category-society","tag-articles","","tg-column-two"],"yoast_head":"\nIs Unaffordable Housing the Next Post-Pandemic Crisis? - Shortform Books<\/title>\n<meta name=\"description\" content=\"What's causing unaffordable housing and how serious is the problem? 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