NHC Analysis: Housing Affordability ‘the Worst in Our Lifetime’

"Housing affordability is the worst it has been in the lifetime of most Americans," according to a new study from the National Housing Conference (NHC), with the path to homeownership remaining elusive for many people nationwide.

David M. Dworkin, President and CEO of NHC weighed in on the state of housing affordability, economic conditions, and what Americans can expect the economy to look like in 2024.

"Housing is also closely linked with the U.S.' perception of upward mobility," said Dworkin. "There’s an additional cruel twist to inflation."

He reported that, over the past year, wage growth has exceeded inflation by about two points, with this positive being further buoyed by greater volumes of available discretionary income than previously.

The report also found that housing inflation has been a major driver of the Core Consumer Price Index (CPI). "[This] has been compounded by the failure to effectively address housing supply by multiple administrations, including the current administration, and both parties in Congress over several changes in leadership."

Dworkin's analysis found that in 2023, a registered nurse could afford to buy a home in only 90 of the 360 markets in the nation. According to NHC’s Paycheck to Paycheck database, in 52% of metro areas (201 markets), "buying a home with an income below $100,000 is a non-starter."

Middle school teachers have it a little better, per the research. Dworkin's analysis found 122 markets considered affordable for this cohort. Dworkin notes that, "the income needed to buy a typically priced home nearly doubled from $73,778 in September 2021 to $120,951 in September 2023." The NHC story targets two responsible factors: increasing mortgage interest rates and ongoing increases in median home prices (in this case, from $299,487 to $348,539).

"In hundreds of communities throughout the country, the cost of rehabbing or building a new home surpasses its value when completed, perpetuating a vicious cycle that keeps neighborhoods underwater and hinders revitalization efforts," noted Dworkin, adding that federal tax credits created by the Neighborhood Homes Investment Act (NHIA) could "be a great resource for red and blue states alike." He continued:

In cities like Detroit, Cleveland, Indianapolis, and Baltimore, neighborhoods stuck in a cycle of growing blight can be restored. But appraisal gaps are also a critical issue in rural areas. More than one in four census tracts in Kentucky are distressed, according to the NHIA criteria. Overall, 45% of Kentucky’s census tracts qualify compared to 29% nationwide. In ten years, NHIA could build or rehab 6,300 homes, creating $1.5 billion in development activity, 11,000 jobs in construction and related industries, $700 million in wages, and $151 million in state and local government revenue.

To read the full report, including more data, quotes, and methodology, click here.

 

Editor's note: This story has been revised for clarity and has removed the line, "Dworkin said the NHC are actually pretty good at helping people out of homelessness," which incorrectly attributed the change to the reporting NHC rather than to the U.S. itself. We apologize for the error.