Affordable Housing Trends
Hi everyone, here's the latest and greatest trend we need to be aware of...especially public officials who have the ability to modify growth restrictions, create higher density zoning and demand more affordable housing through incentivizing developers. It is definitely a problem in our area, as the children of current residents cannot afford to return home and live here based upon the average home prices.
"===Affordability problems escalating even as housing market cools===
With interest rates rising and speculative demand cooling, the housing boom is coming under pressure, finds this year’s "State of the Nation’s Housing" report, released by Harvard's Joint Center for Housing Studies. As long as the economy continues to create jobs and builders trim production to match slowing demand, house prices will keep climbing and the housing sector will likely achieve a soft landing. Although house price growth will likely moderate in many areas, sharp drops in house prices are unlikely anytime soon. Even with higher interest rates and home prices crimping affordability, the lure of house price appreciation continues to draw homebuyers to the market. While the national homeownership rate edged down a tenth of a percent in 2005, it increased in the West and Northeast where house price growth was the strongest. In fact, about one million homeowners were added nationally last year. But, the report cautions, five years of unprecedented house price appreciation and decades of land use restrictions that make building affordable housing difficult are adding to widespread housing affordability problems.
From 2001 to 2004 alone, the number of households spending more than half their incomes on housing increased by 14 percent to 15.8 million. The paradox of today’s housing market is that while more people are building home equity than ever before, slow growth in wages for households in the bottom three-quarters of the income distribution is not keeping pace with escalating housing costs. Amidst a housing boom, it is now impossible to build housing at prices anywhere near what low-income households can afford without subsidies. "
Thanks for Reading!