Will We Ever See Affordable Single-Family Housing Again?

Every area of the country from the huge metropolis to very rural hamlets is having the same problem with the availability of affordable housing. The only real difference is the average price of affordable housing in their area.

Rising home values can quickly transition a reasonable housing market into the type of real estate monster that has consumed places we all know have overpriced housing like the San Francisco Bay Area and New York City.



While the idea of affordable housing in an urban center is out of reach for plenty of Americans, that’s now happening quickly in the rest of the country. Investors are buying up properties and turning them into high-priced rentals making it impossible for the average-income home buyer to buy them.

My small close-knit neighborhood is a prime example of that. Since July of this year, four homes went up for sale with three of them being sold to a single investor who has done very little to improve them. Now all three are rentals with rents approaching double what rents are in other parts of town. Yes, all three were rented within the first week.



GOBankingRates conducted a study to determine which major U.S. cities are on track to lose their label of affordability. GOBankingRates took the overall U.S. median home value and projected its growth over 10 years using Zillow’s September 2022-23 one-year forecast. This projection was then compared to the projections of 537 U.S. cities that currently have home prices below the national median of $356,026, with those surpassing the national median in the next 10 years (plus its projected growth rate over the same period) being deemed “not affordable.” 

Soon, the only real options for affordable housing will be high-rise apartment buildings and manufactured home communities. While both options are good, the days of the single-family home will be coming to an end for many buyers. Even major cities and their suburbs are seeing investors buying up every single home and turning them into rentals.



Some real estate agents are helping investors locate homes for sale before they even go on the block just so they can be turned into rentals. Institutional landlords, major players for decades in the multifamily space, are now exerting an increasing influence in a number of the U.S. markets for detached single-family homes.

In a landscape where rental homes were traditionally owned by individuals or small businesses, these newer players are larger real estate corporations. Large investor purchases rose dramatically after the start of the pandemic with buying by owners of five or more properties reaching 24% of all single-family houses sold nationwide last year.

I really wish this scenario could have a different ending.

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Gary Fleisher

Gary Fleisher, “The Mod Coach”, has been entrenched in the offsite construction industry for most of his life. Having started his career in the lumber industry, Gary spent decades working with manufactured and modular home producers and homebuilders. For the past 15 years his blog and LinkedIn postings have introduced thousands to the benefits of factory-built construction and have served as a forum for industry professionals to share insights and perspectives. Gary lives in Hagerstown, MD with his wife, Peg.

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