Visualizing The Decline Of Affordable Housing In The US

Saturday, May 20, 2020 - 0240 AM

Overcoming the Barriers to Success

80% of U.S. Residents

As of 2023, many people have chosen to live urban.

And,

Below, Visual Capitalist's Chris Dickert & Pernia Jashed explain.

This number is expected to reach nearly 90% by the year 2050.

The housing affordability is affected by the rising house prices.

This is the second of the three-part series.

Reimagining Home series

Our sponsor

Boxabl

Take a look at the history of the U.S. housing market with.

The Housing affordability has reached its lowest level in decades

The U.S. house-price-to-income ratio, which tracks

House prices

Since the mid-1980s when the real estate market was recovering after a crash in the previous decade, the multiple of annual income has been steadily increasing.

In the past, this ratio has been between three and four. In the early 2000s, however, the ratio surpassed four and continued to rise, eventually reaching a peak of

5.11

In 2005. After the subprime meltdown the ratio dropped a little, but it never returned to its historical averages. In 2014, the ratio was 5.33. Then again in 2021 (5.61).

Housing prices were averaged annually to calculate this ratio because median house prices and median household earnings are published at different frequency, quarterly or annually, respectively.

Year

Median House Prices

Median Household Earnings

Ratio

1984

$79,950

$22,415

3.57

1985

$84,275

$23,618

3.57

1986

$92,025

$24,897

3.70

1987

$104,700

$26,061

4.02

1988

$112,225

$27,225

4.12

1989

$120,425

$28,906

4.17

1990

$122,300

$29,943

4.08

1991

$119,975

$30,126

3.98

1992

$121,375

$30,636

3.96

1993

$126,500

$31,241

4.05

1994

$130,425

$32,264

4.04

1995

$133,475

$34,076

3.92

1996

$140,250

$35,492

3.95

1997

$145,000

$37,005

3.92

1998

$151,925

$38,885

3.91

1999

$160,125

$40,696

3.93

2000

$167,550

$41,990

3.99

2001

$173,100

$42,228

4.10

2002

$186,025

$42,409

4.39

2003

$192,125

$43,318

4.44

2004

$218,150

$44,334

4.92

2005

$236,550

$46,326

5.11

2006

$243,750

$48,201

5.06

2007

$244,950

$50,233

4.88

2008

$229,550

$50,303

4.56

2009

$215,650

$49,777

4.33

2010

$222,700

$49,276

4.52

2011

$224,900

$50,054

4.49

2012

$244,400

$51,017

4.79

2013

$266,225

$53,585

4.97

2014

$285,775

$53,657

5.33

2015

$294,150

$56,516

5.20

2016

$305,125

$59,039

5.17

2017

$322,425

$61,136

5.27

2018

$325,275

$63,179

5.15

2019

$320,250

$68,703

4.66

2020

$336,950

$68,010

4.95

2021

$396,800

$70,784

5.61

Housing data are available until the first quarter 2023. Median prices have fallen from $479.500, a record high, at the end 2022, to $436.800, in the first three months of this year.

The median household income is only available as of now

Up to 2021

It's impossible to calculate the ratio beyond that. The ratio is likely to remain near records unless income has increased in an abnormally large way.

During the same 38-year period, the income did not keep pace with the house price rise. In the 38 years between 1984 and 2021 median incomes increased 3.16 times from $22,415 up to $70 784, while median house prices rose 5.26x, from $78,200 to $423 600.

Local Communities Top of Mind for Issue

Residents of the United States have expressed increasing concern over the erosion of housing affordability. In 2018, the

Pew Research Center

When asked what major issues affect local communities, Drug Addiction ranked first at 42 percent, followed by the availability of affordable housing, which ranked third at 39 percent.

In 2021 the situation will reverse itself, with housing affordability being the number one problem, according to 49% respondents. This is an increase of 10%. On the other hand drug addiction fell to 35%.

In general, younger Americans (55%) and urban residents (63%) as well as those with lower incomes (57%), expressed greater concern than their counterparts.

Is there a doctor in the house?

What's the cause of the decline in housing affordability?

The U.S. will not build enough housing to keep up with the population growth. You can see it in the

housing start data

In January 1959 there were approximately 1.7 million housing start-ups, as opposed to January 2023 when there were

1,3 million

This decrease occurred despite the fact the U.S. population almost doubled from 176 million to 335 millions.

There are lots of ways to get involved.

Different forces

Locally, we are all working together to prevent the construction of more homes. One reason is the lack of space. Another culprit is local zoning laws which limit the construction and size of multi-family housing. COVID-19 has also led to global supply chain problems, which have increased the cost of housing materials.

What about the frosting on the cake? Rising

Interest rates

First-time buyers are finding it harder to get into the housing market.

Think Outside the Box When It Comes to Housing

It's time to get creative. With housing affordability at a low point in the past decade, and people concerned that they will not be able find a place of their own to live, now is the perfect time to start thinking outside the box.

Boxabl's advanced mass production techniques allow it to ship and build homes at a significantly lower cost than other methods.

The second part of the trilogy.

Reimagining Home series

The first part of this series takes a deeper look at

Urbanization

The third and final article looks at the affordability crisis in the U.S. by looking at modular homes.

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