Housing Costs Stretch Budgets as Prices Outpace Pay
-
Housing has become unaffordable for many workers as prices rise faster than incomes. A Fed president cites the example of teachers unable to afford a median-priced starter home.
-
Monthly mortgage payments are at record highs, with many homebuyers now "house poor" and spending over 60% of income on housing.
-
Supply constraints and NIMBYism have limited new construction, while demand remains strong. More housing inventory is key to improving affordability.
-
Rents have also spiked, stretching budgets for renters. A typical teacher now faces median asking rents over $2,000 a month.
-
Solutions proposed include zoning reform, smaller/factory homes, partnerships, and incentives to increase supply. But addressing affordability won't be easy.