Without increased supply, housing costs will continue to be unacceptably high
WASHINGTON – RealEstateRama – “Report on the Consumer Price Index (CPI) makes clear that rising housing costs continue to fuel inflation. While increased interest rates are reducing demand, they are also crushing housing supply, blunting their impact,” said David M. Dworkin, President and CEO of the National Housing Conference. “I am increasingly concerned that this blunted tool may be doing more harm than good, and risks reducing the ability of housing markets to lead the nation out of an increasingly unavoidable recession,” Dworkin said.
“As housing affordability continues to worsen, shelter prices, especially rent, continue to be impacted. According to the National Housing Conference’s Paycheck to Paycheck database, the typical home value in the United States is $356,409, an 18% increase over the past year. For example, Miami has seen a 31% increase in typical home values while Orlando and Nashville have seen a 32% increase in typical home values over the past year. Factoring in the increase in mortgage rates, the annual income needed to afford a home in Orlando has now risen 83% from 2021 to buy a home with a 10 percent downpayment. Nashville and Denver see 82% and 62% required income increases respectively. Housing is a continuum. Fewer homeowners mean more renters and higher rents. Without increased supply, pressure on rents will continue to be unacceptably high,” Dworkin said.
“We remain millions of units of affordable housing short. While I don’t expect the Fed to deviate from its strategy of reducing demand through increases in short-term interest rates, Congress can contribute to supply – and inflation reduction – by supporting bipartisan legislation to increase the production and preservation of affordable housing,” Dworkin said
“Bipartisan legislation like the Affordable Housing Credit Improvement Act and the Neighborhood Homes Investment Act would create 2.5 million homes over the next ten years. The law of supply and demand cannot be repealed, and increasing housing supply is the best tool to address inflation,” Dworkin said.
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Founded in 1931, the National Housing Conference is the oldest and broadest housing coalition in America. NHC is a diverse continuum of affordable housing stakeholders that convene and collaborate through dialogue, advocacy, research, and education, to develop equitable solutions that serve our common interest – an America where everyone is able to live in a quality, affordable home in a thriving community. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.
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Whitney Sarkodie
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