Given the high cost of purchasing a home at the current moment in the United States, what can the President and the Executive Branch do on their own? In addition to supporting legislation for a new tax credit, the Biden White House has ideas about its own actions:
Brainard suggested that President Joe Biden will not wait for Congress. The administration, for example, said that it was advocating for zoning reforms that will help unlock the construction of affordable homes.
“Our Department of Transportation is making billions of dollars in low-cost loans available for developing housing near transportation,” Brainard said.
The administration has also been trying to help first-time buyers who have struggled to gain a foothold into homeownership. Home prices were nearly 6 times the median potential first-time homebuyer income in the third quarter, according to NerdWallet’s recent analysis.
The White House pointed out that it was trying to reduce costs for first-time buyers through the the Federal Housing Administration program. The effort, it said, helped reduce mortgage insurance premiums by 0.3 percent.
Many presidents from the early 20th century onward have promoted homeownership in rhetoric and policy. These proposed actions would continue this pattern. Could a president even if elected if they did not support homeownership for the masses? See great quotes in homeownership.
Of course, the President and the Executive Branch can only do so much in this area. Yet, a number of important changes to housing policy have come through this branch. Will Biden make a significant change or is this about temporary salves? All of these proposals do not alter the fundamental economic realities that make current homes so expensive. They offer incentives or help around the edges. Addressing zoning from a federal level could prove interesting as it is such a local matter.
The findings from one of the largest surveys done on these issues shows significant but varying support for 10 policy initiatives to encourage more housing. At the high end, nearly 9 in 10 (86%) say they would back efforts to expedite permitting processes, while at the lower end, about half (49%) support the concept of allowing smaller lots, and homes to be built closer together…
Support for most of the housing policies transcended the usual fault lines of political party, region, race, income, and gender. The eight most popular proposals received clear majority support from Republicans, Democrats, and independents. In addition, 9 of the 10 tested measures received majority support from both renters and homeowners. All of these policies have either already been shown to work in improving housing affordability in American cities and towns or have recently been enacted by state or city policymakers hoping to do so.
Some approaches that stood out as especially popular—earning support from more than 70% of respondents—are similar to state laws that have passed in recent years (although the survey questions themselves were not modeled on any particular laws). For example, in 2023, California, Montana, Texas, and Washington took steps to simplify permitting for new housing. In recent years, California, Massachusetts, Montana, and Utah have passed laws to enable more housing near commerce or transit. And Maine, Montana, Oregon, Utah, and Vermont, among others, have enacted legislation to allow houses to have an accessory apartment or dwelling unit, as have many cities…
Respondents also broadly supported the reasons behind efforts to create more housing, with 65% to 82% seeing each reason as excellent or good. (See Figures 3 and 4.) However, in some cases, Republicans and Democrats prioritized different reasons. For example, somewhat more Republicans (68%) than Democrats (62%) identified freedom for property owners as an excellent or good reason, while more Democrats (81%) than Republicans (49%) chose reducing racial segregation as an excellent or good reason. But large majorities of Democrats, Republicans, and independents see improving housing affordability and allowing more people to live near their preferred jobs and schools as excellent or good reasons to change housing rules to allow more homes to be built in cities and suburbs. Successful state-level efforts to allow more housing have consistently received bipartisan support, and the survey results indicate that people with different political views can come together to support policies to end the housing shortage and affordability crisis for different reasons.
Americans like the idea of owning housing. Add this to the current state of housing where both owning and renting is expensive and Americans broadly like more housing.
Thus, the expression of this majority for housing is difficult to put into practice. Even state laws are often fraught as it can run against local desires. Take the efforts in Illinois to promote affordable housing at the state level: the initial legislation had limited enforcement and more would need to be done for state-level policy to provide more housing.
As noted above, one of the routes forward that could gather more local support involves policies that provide more opportunities for current property owners. Adding ADUs, for example, provides a choice for current property owners to generate more income or provide housing for family. Other policies might be viewed as funneling money to outside developers or providing housing for people who would not be as welcome in the community. If policies can add housing units and enrich/protect homeowners, they might find more support.
The Zinnick’s aren’t alone: Older buyers are prevailing in America’s hot housing market. This year, the median age for a repeat buyer – someone who has bought a home before – was 58, according to data released Monday by the National Association of Realtors. That’s down just a smidgen from last year’s record of 59, but it’s up significantly from 36 years old in 1981, when NAR began conducting its survey.
Lately, grandparents have been edging out younger buyers who are struggling to get into the market for the first time. Nowadays, first-time buyers make up 32 percent of the market, well below an average of 38 percent since 1981, according to NAR. They’re also more likely to be in their mid-30s today, in contrast to their late 20s in the early 1980s…
There are many reasons. For starters, older buyers are also likely to be selling a house, which provides them fresh cash. Indeed, the typical home seller was 60 years old in 2023, according to NAR, the same as last year.
And with so few homes available, sellers often go with the potential buyer making the most attractive offer – be it a large down payment, stellar credit or all cash. There, too, older buyers have a leg up…
That often leaves seniors and aspiring first-time buyers competing for similar types of homes – just a couple of bedrooms, not too much upkeep. Usually, there’s a clear winner.
If you have the wealth from owning a home, you can then put that wealth into something else – if you so choose. So, if housing values have tripled to quintupled, there is plenty of resources to apply to a new home. The home gets turned into a new home (and perhaps leftover cash). One advantage begets another, what some have called The Matthew Effect.
In theory, this is how Americans expect homeownership to work: you purchase a home, you get to live in the home, and then at some point you cash out because the home offers a strong return on investment. But, as this story notes, this is not a good story for everyone. Others who might be competing in the housing market may not have the same resources. Or, not mentioned are seniors who have not owned homes or owned properties that did not appreciate much.
Is this just a blip in the grand scheme of things because of unique conditions in the housing market? Or, is this a long-term change where those who bought homes in the past now reap certain rewards? The outcome of this could help influence the life outcomes of a lot of Americans in the coming years.
Building on yesterday’s post regarding the growing homeownership rate of millennials, I wonder: how much do Americans today feel they deserve to be able to own a home? It is one thing to make a choice to buy a property, it is another to feel that the economic and social conditions render this difficult or impossible. Here are several factors complicating this issue:
The American social contract includes a house. Many Americans expect they should be able to purchase a home. I would guess that Americans and the American structures will continue to pursue and promote homeownership, even when it might be difficult. A big change might require a significant event or a steady long-term process moving toward different housing preferences and possibilities.
Immediately, the rankings revealed a stark geographical pattern. The first surprise—especially for professors who have spent our careers studying urban poverty—was that the most disadvantaged places on our index were primarily rural. But they didn’t fit the stereotypical image of rural America. Though some of these were majority white, most were majority Black or Hispanic. We could see, too, that many places with large Native American populations ranked among the most disadvantaged in the nation. Considerable poverty exists in Chicago, Los Angeles, and New York. But in our apples-to-apples comparison, none of those cities ranked among even the 600 most disadvantaged places in the nation. The only cities on that list were a relatively small number of industrial municipalities such as Cleveland, Detroit, and Rochester…
The places that our index identified as the 200 most disadvantaged are concentrated in three regions—Appalachia, South Texas, and the southern Cotton Belt. (Not one county in the West, apart from those with disproportionately large Native American communities, showed up on the list.) These places share a history of intensive resource extraction and human exploitation not seen to the same degree elsewhere in the United States. In each place, this economic pattern emerged (or, in the case of the Cotton Belt, fully flourished) in the late 19th or early 20th century. In each place, one industry came to dominate the economy, a pattern that held, broadly, until the 1960s, when King Cotton, King Tobacco, King Coal, and South Texas agriculture, would bow to the twin forces of automation and global competition…
Exploring the other end of our Index of Deep Disadvantage—the places identified as those of greatest advantage—was also vital to our research. Once again, we were surprised by where the index took us. It was not Manhattan or tech-rich Seattle. Instead, the list pointed us to the upper Midwest: Minnesota, the Dakotas, Wisconsin, Nebraska, and Iowa. Overall, poverty rates in these places are very low, babies are born healthy, people live to a ripe old age, and a low-income child usually has a similar chance of making it into the middle class as any other kid.
Counties that rank among those of greatest advantage began as agricultural communities with modestly sized farms, many originally secured through the 1862 Homestead Act that made landownership widely available. Many of these places have built on this history of broad-based wealth by making significant investments in schools, which has contributed to high graduation and college enrollment rates over generations. Using the best data available, we found that they have enjoyed the lowest rates of violent crime, income inequality, and public corruption in the nation. These counties are unusually rich in social capital: Residents are connected to one another through volunteerism, membership in civic organizations, and participation in other community activities.
Who owns land? Who benefits from working it? It sounds like the Upper Midwest offered more opportunities for settlers to purchase land and develop wealth over the long run. In contrast, the three areas of disadvantage identified had more disparities in land ownership versus who worked the land. Additionally, Native Americans were removed from land that offered opportunities.
Approaches to addressing inequality and poverty in the United States can often involve homeownership but less discussed is land. A house is often tied to a particular property that has its own value. The land identified in the rankings above were particularly important for subsistence. This is not so much the case with urban and suburban land today where the proximity of the land to amenities and the size of the lot matter more than the owner’s ability to live off of it.
The rankings above also hint at the long-term consequences of land ownership. Who can access and own land now will matter for decades, possibly centuries.
From the beginning, much of Barbie’s existence — her unrealistic physical proportions, the lack of racially diverse dolls, the toy’s reinforcing of gender roles — has been debated in jest and in seriousness. But her home, which has not been as publicly parsed or praised like the doll, has been a mirror for the various social, political and economic changes the rest of the country was experiencing. It has followed housing patterns and trends, from chic, compact urban living to suburban sprawl to pure excess. At times, it has been out of step, ignoring the country’s ills (Barbie’s never been broke; she has never lost her house to foreclosure)…
Financial institutions frequently turned down mortgage applications for women without male co-signers when Mattel debuted the Dreamhouse in 1962, three years after Barbie shook up the toy world, arriving in a one-piece bathing suit and kitten heels…
Society has held up “this promise of homeownership as part and parcel of the American dream,” for centuries, said Ms. Castro. More than 60 years of Barbie’s Dreamhouses have further instilled that in us from a young age.
To own a home at all, especially one with a three-story slide, can feel unattainable for most. From July 2021 to June 2022, home buyers were richer, whiter and older than they had been in decades. The share that were first-time homeowners was the lowest its been since at least 1981. And, the median home price exceeded $400,000 for the first time.
It’s called a Dreamhouse for a reason. We can all dream, can’t we?
Is the Barbie Dreamhouse simply a plot to teach children that they should aspire for a large home with all the latest furnishings and in a bright style?
Stickers on the back windows of cars can signal all sorts of things. The number of family members. A favorite vacation spot. A beloved car brand or sports team.
What would a house sticker in the back window mean?
I recently saw a SUV with a two-story house sticker. The sticker looks similar to a drawing a child might make of a house. The picture below has such an image; this sticker had much cleaner lines but had a similar shape.
Twenty-one percent of U.S. adults believe it is a good time to buy a house, down nine percentage points from the prior low recorded last year. The 2022 and 2023 readings are the only times that less than half of Americans have perceived the housing market as being good for buyers in Gallup’s trend since 1978…
Gallup first asked Americans about their perceptions of the housing market in 1978, when 53% thought it was a good time to buy a house. Thirteen years later, when the question was asked again, 67% held that view. The record high of 81% was recorded in 2003, at a time of growing homeownership rates and housing prices…
Opinions of the housing market are bleak and generally similar among all major subgroups, including by region, urbanicity, homeownership status, income, education and party identification. Subgroups in these categories range from 18% to 24% thinking it is a good time to buy a house.
Americans tend to like homeownership. Thus, this data could be interest if it goes toward the direction toward less interest in buying homes and less support for policies that privilege homeownership. If enough Americans are this pessimistic, perhaps they do not think they can pursue owning a home. Perhaps they want policies that provide help for renting or other housing options. Perhaps their inability to purchase a home at younger ages means they will not be able to catch up later.
However, I suspect the pessimism of 2022 and 2023 is tied to current conditions more than it signals a large shift in how Americans think about homeownership. The Gallup data suggests support went down a bit in the mid-2010s and then dropped off in the last two years. It might take another year or two to see if (1) housing conditions improve and (2) support rises. Of course, housing conditions may not improve much and a longer-term run of pessimism could lead to bigger changes.
The bigger question might be this: how many years of negative perceptions about owning a home will it take for patterns to change long-term?
From reading the chart, the rise in average prices is over 500% from roughly $90,000 in late 1983 to over $500,000 in early 2023. This, presumably, can be seen in communities across the country.
Now there is a lot of money tied up in homes and real estate plus homes have become an even more important marker of wealth. As the article asked, will the transfer of wealth in these homes simply reproduce existing disparities in housing? Or, might there be ways that the increased value of housing help promote access and opportunities for others?
U.S. homeowners have lost $2.3 trillion since June, according to a new report from the real-estate brokerage Redfin. The total value of U.S. homes was $45.3 trillion at the end of 2022, down 4.9% from a record high of $47.7 trillion in June. That figure signifies the largest June-to-December percentage decline since 2008.
But housing wealth is significantly up since the beginning of COVID-19:
“The housing market has shed some of its value, but most homeowners will still reap big rewards from the pandemic housing boom. The total value of U.S. homes remains roughly $13 trillion higher than it was in February 2020, the month before the coronavirus was declared a pandemic,” said Redfin Economics Research Lead Chen Zhao in the report.
“Unfortunately, a lot of people were left behind. Many Americans couldn’t afford to buy homes even when mortgage rates hit rock bottom in 2021, which means they missed out on a significant wealth building opportunity,” Zhao added.
Hence, I am a little confused by the story that leads with the recent data. The recent drop is just a portion of the big gain from February 2020 on. People do feel losses strongly but the bigger picture is that homeowners have gained much in recent years.
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