Highlights
- Americans across all demographic groups and political persuasions prefer single-family housing to apartments. Post This
- For young Americans, housing has become crushingly expensive in most of the country, crippling their economic and family futures. Post This
- The American dream of owning good housing at a good price is increasingly unobtainable, especially for Americans under age 35. Post This
There is considerable concern about housing affordability in the United States. Housing is the most expensive element of the cost of living, which makes it an important issue to both households and governments. Indeed, the high cost of housing relative to income (i.e. the degree of affordability) is an existential threat to the future of the middle-class in some housing markets (metropolitan areas), and even threatens to jeopardize the demographic future of the republic. While the housing situation has not become a crisis everywhere—and for older Americans remains relatively affordable—for young Americans, housing has become crushingly expensive in most of the country, crippling their economic and family futures.
Whereas in 1969, the price of a median home cost about five years of a young adult’s income, today it costs nearly nine years. As we show in a new Institute for Family Studies report, Homes For Young Families: A Pro-Family Housing Agenda, since 1970, the share of young adults who own the home they live in has declined from 50% to around 25-30 percent. Moreover, across metro areas, the share of housing markets we define as “Seriously Unaffordable” or worse (i.e. median homes worth 10 years or more of a young adult’s income) rose from 1% to 37 percent. By far, these increases were the most severe in large coastal markets, which is why Americans are increasingly migrating away from these markets in pursuit of affordability.
Many factors have conspired to worsen housing affordability for young adults, but two sets of policies in particular have dramatically boosted housing costs without producing economic benefits to offset cost: 1) local land-use rules limiting housing supply, and 2) urban growth boundaries preventing greenfield development. We find that the most unaffordable housing is overwhelmingly likely to have both urban growth boundaries and very strict local land-use rules. As a result, it is no exaggeration to say that the housing affordability crisis facing American young adults has substantially been caused by bad urban and regional planning, and bad local land-use policies.
Since the housing affordability crisis facing young adults is largely policy-induced, we propose a wide range of policy fixes for every level of government, including: extremely local HOAs; municipal zoning related to parking, ADUs, renovations, policing priorities, and lot size; state rules governing municipalities and educational programs; and federal housing programs and housing assistance. Our proposals are focused on ensuring that obstacles to new housing supply are removed, and especially on encouraging policymakers to focus on the regulations that substantively burden the transition into family life.
Key Findings:
- Americans across all demographic groups and political persuasions prefer single-family housing to apartments.
- Americans overwhelmingly prioritize homes with many bedrooms in neighborhoods with low crime and good schools when seeking housing for their family. Walkability, commuting length, neighborhood cleanliness and aesthetics, and housing type (single family vs. apartment) are also important.
- Americans do not rate nearby restaurants and amenities, neighborhood diversity or neighborhood culture, public transit access, or yard size as being very important.
- Houses have become far less affordable for Americans under age 35 in recent decades: median home prices in metro areas rose from 5.1 times young adult incomes in 1969 to 11.4 times their incomes today.
- Homeownership prevalence for Americans under age 35 has fallen from 50% between 1960 and 1980 to just 30% today.
- Home price increases have been by far the most severe in metro areas with more intense land-use regulations, including both local area rules and regional or municipal urban growth barriers.
- Domestic migration patterns increasingly show Americans moving away from low-affordability metro areas into high-affordability metro areas.
- Local, state, and federal policy changes could improve the affordability of housing for young Americans hoping to start families, and thus boost marriage and fertility.
Download the full IFS report, Homes for Young Families.
