‘US housing crisis to continue if Congress fails to address its root cause’
Americans face a dramatic housing shortage, sending home prices and rents through the roof all over the United States, CNN reports.
The surge in housing costs is making it more difficult for some Americans to buy their first home and for some others to afford their rent, increasing demand for subsidized housing and widening the wealth gap between renters and homeowners, the report adds.
The spike is also forcing more American households to live farther from their workplaces, increasing commute times, undercutting labor force participation and slowing economic growth.
“Fortunately, Congress has an opportunity to address the problem in the Build Back Better legislation currently on the table. Unfortunately, it appears the housing solutions that dominate the package are more focused on addressing the symptoms of this growing crisis rather than its root cause,” according to the report.
Since the days following the financial crisis over a decade ago, far too few homes have been built to meet demand. The shortfall is presently close to 1.8 million homes – or nearly the number of homes constructed in an entire year – resulting in a record low vacancy rate for homes for sale and close to one for homes for rent.
“But even these daunting numbers don't capture the gravity of the problem, as the entire shortfall comes at the bottom end of the market. As in the rest of the economy, it is those of more modest means who are bearing the burden,” according to the report.
The current imbalance between supply and demand is not something new, however, the opportunity to address it is as, for the first time in decades, Congress is discussing a significant rise in domestic spending to help meet the wide range of social and economic needs.
“If there were ever a moment to balance the increasingly burdensome shortfall in housing supply, this is it,” the report concludes.
A report from the US Commerce Department in June showed house prices in the US have increased by the most in over 15 years on an annual basis due to the rising prices of construction materials.
Homebuilding recovered less than expected in May as very expensive lumber and shortages of other materials continued to restrain builders' ability to take advantage of a severe shortage of houses on the market.
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