Are you ready to buy a new home? The way you buy one may soon change drastically.
According to Bloomberg, housing affordability nationwide is the worst it has ever been on record due to spiking home prices and interest rates and now it’s reaching every area of the country.
In September 2022, a median-income household would have had to spend a little over 46 percent of its income to afford a median-priced home. That’s a 14-point spike from September 2021, when a household had to spend about a third of its income to afford a home in its community.
Today, in only one U.S. metro area, Toledo, OH, with more than 500,000 people, a median-income household would have to spend more than 30 percent of its income to own a median-priced home.
It will soon become almost impossible for median-income families to buy anything near the median-priced home in their area without the help of government programs, outright grants, or another housing recession like we had in 2008.
The real problems are not that people aren’t earning enough or can’t find housing in their area but rather its rampant inflation, rising transportation costs, and supply chain issues.
For affordable housing to once again enter our vocabulary, we must be willing to live with less. Less space, fewer options, and fewer expectations. The market for smaller homes in closer proximity with fewer frills may soon become a reality. But in order to accomplish this, families must begin to accept the realization that the days of the single-family home with a white picket fence are over and multi-story, multi-family housing and living small are coming into view rather quickly.
Gary Fleisher, Contributing Editor
