World Insights: American dream of affordable houses fading away

BEIJING, Nov. 2 (Xinhua) — Erica Duvall lives with her nine-year-old daughter in a one-bedroom apartment on the outskirts of Harrisburg, Pennsylvania. She described putting a roof over their heads as an “impossible” task.
“I definitely make the most money that I’ve ever made … and it’s still not enough to keep up,” said the 29-year-old single mom, lamenting that her rent increased by 100 U.S. dollars per month when she renewed her lease last December and may rise again this winter.
For Duvall and her numerous peers in America, rent day is no easy time. According to a Gallup report from May, the cost of owning or renting a home amidst high living expenses and spiraling inflation ranks among the most pressing financial challenges for families. A Harvard youth poll from spring 2024 indicates that housing, along with inflation and healthcare, is a top concern for 18-to-29-year-olds nationwide.

SURGING COSTS
Despite a recent slowdown in growth, rents in the United States have gone up 26 percent nationwide since early 2020, according to the State of the Nation’s Housing 2024 report by Harvard University.
While renters struggle with rising rents, homebuyers are also grappling with an out-of-control real estate market afflicted with soaring prices and limited supply. Data from Realtor.com shows that home prices have risen 29 percent since 2020.
According to U.S. online real estate brokerage Redfin, the median U.S. home-sale price reached an all-time high of 427,496 dollars in September, reflecting a year-over-year increase of 3.8 percent.
The shortage of affordable housing compounds these issues. A recent report by the CBRE, a global commercial real estate firm, estimates a shortfall of 3.9 million housing units in the United States.
Since 2010, approximately 1.1 million houses have been built each year, according to the U.S. Census Bureau, which falls far short of the 1.6 million needed to meet the demand from prospective homeowners.

SHAKY SOLUTIONS
As presidential campaigns heat up, both the Democratic and Republican parties are scrambling to present housing proposals to win votes, though detailed plans remain elusive. Generally, the Democratic Party advocates for government intervention, fiscal support, and policy reforms, while the Republican Party promotes market-driven solutions to stimulate private sector involvement and increase housing supply.
However, the proposals from both parties face scrutiny. “The supply issues need to be addressed first; otherwise, it will be inflationary.” said U.S. News Senior Real Estate Economist Patrick Duffy.
The Democratic Party’s proposal for down-payment assistance for first-time homebuyers could “inflate housing demand,” according to Andra Ghent, a finance professor at the University of Utah, who argues it will ultimately “raise home prices.”
“Most of that money will benefit housing developers, not individual households,” she added.
The Democratic plan to remove key tax benefits for major investors targeting predatory practices may also backfire, as not all investors are predatory. Ghent warned that reducing tax benefits could lead to higher rents. “More capital invested in single-family rentals means lower rents for families,” she said.
On the Republican side, proposals to deport undocumented immigrants to reduce demand and ban their mortgage loans raise concerns.
“A lot of immigrants work in housing,” said Duffy, suggesting that this could “solve one issue and create another: a labor shortage.”
Ghent observed that a decrease in construction labor would likely force construction companies to raise wages, further driving up housing prices.
The Republican Party also mentioned plans to open federal land for housing construction. However, over 90 percent of federal lands are in Western states, often in less populated areas, limiting the availability of land for development.
According to a CBS News poll, 32 percent of voters aged 18-29 and half of those aged 30-64 feel they may never achieve the American Dream of homeownership.
Among voters under 30, 82 percent believe it is harder to buy a home now than in previous generations. For many Americans, affording a home seems increasingly like an unattainable dream. ■