A new report argues that America is currently in the midst of a “housing crisis,” as the number of homes available fails to keep pace with surging demand for real estate, freezing many prospective homeowners out of the market under current conditions.
The report begins by announcing, “America is experiencing a housing crisis,” and the content of the report attempts to underscore the severity of this point. The authors note that there is a deficit of 3.8 million homes short of housing needs—twice the number from 2012, accompanied by a rapid increase in home prices making an increasingly prohibitive market.
The report marked a notable departure from previous releases from Up for Growth, as the authors made a point of using a “racial equity lens” to emphasize the racial dimension of the housing situation—9 pages of the 75-page paper are explicitly dedicated to racial politics.
The organization’s new methodology also purports to allow for more granular, local precision. The authors of this report have also chosen to rely on “publicly available” and “annually updated” data sources, with the stated intention of allowing swift and effective policy action in response to the issue.
While the factors and circumstances driving the current real estate crunch are numerous, they tend to revolve around one key issue: a lack of inventory, which drives up prices and has recently begun to hamper the rate of home sales.
Expensive CaliforniaNowhere is the housing crisis more severe than in California, the most expensive state for housing, which has seen home values skyrocket since the start of the pandemic.
Last May, median home prices in California set a new record at $898,000, more than 10 percent higher than at the same time last year and over $100,000 more than the second-runner state for most expensive median home price, Hawaii.
This trend has left home ownership off the table even for the relatively affluent residents of the Golden State, with the median home selling for more than 25 times the median annual income.
While California is the most severe case of the current housing crisis, virtually nowhere in the United States has been spared from rapidly rising real estate costs. Until housing prices begin to cool down, the main victims of this housing crisis will continue to be the middle class, whose dreams of home ownership have been put on indefinite hold as a consequence of prohibitive prices and a competitive market.