The currently prevailing housing market trends in the U.S. have a severely negative impact on the affordability of houses and the overall value of the house market business but certain factors may help reduce the intensity of the problem, if not completely solve it. Currently, the U.S. housing market follows trends that involve getting high mortgage rates, an increased price of houses, liability of single-family house-building, an increase in the number of homes up for sale, and a decline in the sales of houses in the market.
Some of the most reasonable solutions to these problems lie in addressing the core problems behind these issues such as the employment of traditional building methods, reluctance to adopt new developmental technology, a lack of awareness about the changing trends of the housing market, high mortgage rates set by sellers, inflation, and an overall lack of resources. Addressing these factors and adopting advanced trends is the only way to cope with the challenge of the affordable housing crisis.
Current Housing Market Trends in the U.S.
Current housing market trends in the U.S. are similar to that of Florida, which is regarded as one of the least affordable places to live in the U.S. Although the degree of seriousness of the issue of affordable housing is not as extreme as that in Florida but the problem shares common subject values such as:
High Mortgage Rates:
One of the primary reason behind the increased pieces of houses in Florida and most of the U.S.is the high mortgagee rate on land. The rate has been continuously increasing since the last three years since the COVID-19 pandemic hit the country. The mortgage rates have gone up by almost 40-50% within the last year. This has also resulted in many homeowners becoming home-renters as they had to sell their house due to job loss during the pandemic.
A Disproportionate Seller-Buyer Ratio:
The high mortgage rates, massive unemployment, and single family housing system have resulted in the production of a disproportionate seller-buyer ratio. The last 3-4 years since 2019,when the pandemic hit the country, many homeowners have become home-renters due to increased inflation rates and inability to pay an ever-increasing mortgage. So, more and more people have been inclined to put their houses up for sale. But unfortunately, the buyer rate doesn’t directly relate to the seller rate and hence, as the seller rate increases the buyer rates for the houses keeps decreasing due to similar factors. This causes an extreme imbalance to develop in the housing market of the U.S.
The Single Family Housing System Implementation:
The authorities in most parts of the U.S., including Florida, have implemented a single-house policy implementation. According to this policy, a house owner can only build house for a single family and only a specific quota is allowed to build houses suitable for two families and which can be put up for rent. This gives rise to yet another problem of rent increase in such areas.
A Decrease in the Degree of Development of New Houses:
Due to the rising inflation and prices of goods and resources, the housing market has almost hit the rock bottom in the U.S. as very little budget is being spent for developmental projects. The government doesn’t have enough resources to build new houses to support the under-privileged. All of the aforementioned factor only worsen the problem and cause a developmental system to develop in which the degree of development of new houses significantly decrease.
What is Affordable Housing?
Affordable housing is a concept according to which every person holds the right to own a house of their own and it can only be considered justly acquired and owned when it costs them almost 30% or 1/3 of their total monthly income. A housing cost which doesn’t deprive people of enjoying other basic necessities of life while leaving a room for gaining new development is what is called affordable housing. Affordable housing is an initiative to make provision and owning of adequate living spaces available to anyone and everyone at an affordable price.
Steps to Move Towards More Affordable Housing
Certain initiative’s can be taken to make affordable housing a dream come true for everyone. But, a thorough implementation of these steps is only possible through an effective collaboration of both governmental and private institutions. Some of the major steps to mainstream affordable housing include
Maintaining the Seller-Buyer Ratio:
The most important step in mainstreaming and providing affordable housing to everyone is maintaining the equilibrium in the seller-buyer ratio. It is very important to maintain the balance between the buyer’s ratio and the seller’s ratio and this can be done through decreasing mortgage rates, providing people better job opportunities, and creating awareness about advanced and relatively more efficient building techniques.
A Hike in Monthly Income:
One of the most crucial steps in solving the affordable housing crisis is making a hike in the average monthly wage of a person. The minimum wage value must be increased. When people get a reasonable wage and they are able to save up a little, they are very likely to buy a house which will cause a balance in the seller-buyer ratio as well. The average price for a single-family house has increased by almost 16.9% from 2020-21 and 11% from 2021 onwards. On the other hand, the average wages have decreased by 2.6% within one year and the inflation rate risen by 7%. This describes the impact of average income of the affordability of house in the U.S.
Making Affordable Housing More Accessible:
In order to make affordable housing more accessible to public the public needs to know about advanced ways and alternatives to the traditional building and architectural methods which could help them reduce the costs of building materials and resources to make the availability of a house quicker for them. The public needs to know about ways and techniques such as:
- 3D printing (a significantly affordable way of building houses while cutting on significant money loss such as the labor force and resources with a better and advanced technological alternative).
- Spreading awareness among the people about money-saving advanced alternatives and introducing improved policies to promote such building companies.
- Creating long-term policies to control inflation and increase monthly wages than reducing rents.
- Keeping a check on the construction companies to keep the house building projects going regularly and controlling the number of incomplete constructions would only serve as a waste of building materials and labor.
How to Help?
There are several ways through which an individual can try to bring about some change in the house building market and mainstream affordable housing for everyone. A cooperative attitude between the government and the people, however, is compulsory to solve the affordable housing crisis and end the struggle from its roots. Some of the major steps include:
- Upholding suitable and sufficient minimum wage criteria for everyone
- Decreasing the mortgage fund on house ownership.
- Joining charity organizations such as Community Reach and donating to them so that they can spread awareness among the people about affordable housing as well as build houses for the absolutely underprivileged people.
- Support organizations which may support the affordable housing projects and raise voice about the concerns of the underprivileged people.
