This article was originally featured in Housing Affordability Institute’s United States of Housing Annual Report (2024 Edition).

It is impossible to address housing access and homeownership in America over the past several years without hearing the term “housing crisis.” This term appears in news articles and kitchen table conversations across the United States. But, as overused and cliché as that term may
be, that’s exactly what experts say this is: a crisis.

“Look up ‘crisis’ and you get three definitions that truly explain the state of the housing market at the moment,” said Nick Erickson, executive director of Housing Affordability Institute. “It is the last two definitions that best explain the state of housing in America. One says a crisis is a time when a difficult or important decision must be made. The other says a crisis is a turning point when important changes take place, indicating if a recovery is possible. Right now is a time when policymakers have to make important decisions about the future of housing in America.”

And it’s not just a single crisis, it is a crisis on multiple fronts according to the data: housing inventory, housing inflation, housing affordability, and housing access for communities of color.

HOUSING DEFICIT

Housing production in the United States has yet to fully recover from the Great Recession, creating a massive shortage of housing in America. Estimates place the underbuilding of homes between 3 million and 5 million units, several years of housing production.

Measuring the nation’s attempt to address the housing crisis by housing production, 2023 was a step backward, with housing production falling more than 10% year-over-year.

DECREASING AFFORDABILITY

While new and existing home prices moderated in 2023 from their all-time highs in 2022 consumers did not see an increase in affordability.

First Time Affordability Chart

Source: National Association of Realtors

Shiny Objects

This isn’t to say that all ideas for addressing the crisis are steps in the right direction. Some of the more popular policy proposals with voters don’t move the needle on addressing the crisis, while others have an adverse impact on supply.

“Reforms must be judged on their impact on the market as a whole,” said Erickson. “It may be politically popular to target symptoms of the broken housing ecosystem, however, we
must treat the disease. This is a supply-side problem and a regulatory-barrier problem, and this requires supply-side barriers that lift regulatory roadblocks.”

One example is single-family home rentals. Policymakers at the state and federal levels have examined proposed bans on corporate ownership of single-family rental and single-family
build-for-rent homes

Particularly concerning is any legislation seeking to block new single-family rental projects, noted Erickson. “We have a housing deficit and any policy proposal that seeks to make
it harder to build safe, durable, and affordable housing is a non-starter. With multifamily starts declining and high interest rates causing affordability and mobility challenges, single-family build-for-rent projects are serving a critical part of the housing market.”

Hope Remains

The crisis, while years in the making, does not need to remain. Experts say solutions to the nation’s housing crisis exist. Lifting barriers to housing production and roadblocks to affordability can simultaneously address the lack of housing and the affordability erosion over the past decade and a half.

“In city halls, in state capitols, and as a nation, we are at a turning point,” said Erickson. “Important decisions need to be made, and the decisions will have immense consequences on
the future of homeownership, the economy, and Americans now and in the generation to come.”