Despite a nationwide construction boom, the available housing supply continues to fall short of what is needed, says a new report just released by Harvard University’s Joint Center for Housing Studies.
While the number of people actually comprising households has returned to pre-Great Recession levels, says the State of the Nation’s Housing 2019 report, new home construction remains stubbornly sluggish.
That slow pace, in turn, is inflating the price of the new homes that are available, negatively impacting housing affordability for millions of working Americans.
At issue, according to the report, is both the rising cost of available land upon which to build and continued regulatory constraints.
“These constraints, largely imposed at the local level, raise costs and limit the number of homes that can be built in places where demand is highest,” says Chris Herbert, managing director of the Joint Center for Housing Studies, in a statement.
The Harvard study found that new home construction is most vibrant in the higher-end markets, with middle market housing construction, partly due to increased land costs, remaining too expensive for many home builders to tackle.
But the report also forecasts that both the growing number of Millennials entering the home-buying market, combined with the Baby Boomers who already own homes, will lead to a vibrant home remodeling market.
The rental market, too, is expected to expand with an anticipated 400,000 new units slated for construction each year for the next decade.
Harvard researchers also show that the share of homes available to median-income individuals varies widely in the West.
In metro Albuquerque, median household income stands at $50,900, with the share of affordable homes at 68.4 percent; El Paso has a median household income of $44,400; with a nearly 77 percent share of affordable homes.
But in the booming Denver-Aurora-Lakewood market, the median income stands at $76,600, with the share of affordable homes at only 49 percent.
By Garry Boulard
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