During the National Homeownership Month in June, The National Association of Home Builders (NAHB) is urging Congress to address the housing affordability problem in the United States.
Even with the recent mortgage interest rate drop, housing affordability is close to where it was a year ago, according to the NAHB. The NAHB/Wells Fargo Housing Opportunity Index found only 61% of new and existing homes were affordable to a typical household. The current homeownership rate (64.2 percent) remains below the 25-year average rate (66.3 percent), according to the Census Bureau’s Housing Vacancy Survey (HVS).
More than half (53 percent) of buyers actively searching for a home in the first quarter of 2019 have been looking for three months or longer, according to NAHB’s Housing Trends Report (HTR). Home buyers say high home prices are the principal barrier to homeownership. A majority (78 percent) of buyers estimated they could afford fewer than half of the homes for-sale in their markets.
In its message to legislators, the NAHB urges them remove what it calls “excessive regulations.” While the association recognizes that other factors—such as a tight labor market, tariffs, and housing finance concerns—are also driving up homeownership costs, it states that regulatory requirements, alone, account for 25% of the price of a single-family home, and 30% of the cost of a multifamily dwelling.
“Removing regulatory barriers that contribute to the increased costs of housing will pave the way to homeownership,” said NAHB Chairman Greg Ugalde, in a public statement.
Jerry Howard, CEO of the NAHB, provided additional details during his keynote presentation at the National Lumber and Building Material Dealers Association Spring Meeting and Legislative Conference in Washington D.C.: “You have the far-left wing that wants to regulate the production of a house and increase the cost. Then, they want to tax the consumer of that house extra so that they can come back [with] a subsidy to lower the cost of the house. Now, that doesn’t make sense in any way, shape, or form if you’re running the country like a business. That’s one of the key points that we’re trying to make—overregulation is crushing us.”
Read the full coverage of Howard’s keynote address in the article “NAHB CEO Warns Housing Affordability is a ‘Major Problem’.”
