Housing Situation In The U.S. Continues to Worsen

The American dream is often sought but hardly ever realized. In an ideal world, America would have ample room for affordable housing bustling with happy and safe communities. What is not commonly discussed is the state of our housing buying situation in the United States, which continually gets worse by the day.

What’s Going on With the Housing Market? 

You may have heard that some things are going incredibly wrong with the housing situation in the U.S., but what are they? 

Sky High Home Prices 

One of the leading causes of these issues is the increasing base price that is being asked for the average home. According to the U.S. Census, the median home value in the United States in 2000 was $119,600. The average rate in 2022 was $530,700, almost five times what it was just two decades earlier! 

Several factors contribute to the rising prices of homes in the United States, including the specific property being sold, its location, and the overall economic environment.

Most sources say supply and demand are among the most important underlying causes. Simply put, if there are not many houses in an area of high demand, the price will increase. Considering our current situation with growing cities and moving populations, it isn’t hard to believe that the supply of houses across the country is declining. 

Investors and Market Buying

Sources such as Forbes point out that investors and other major players in the housing industry are also influencing the situation. Investors have been purchasing houses for various reasons in recent years (as well as in the past), which strains the system by reducing the number of houses available. At the same time, thousands of families continue to search for homes.

These investors have recently been increasing the number of houses they purchase, further worsening the problems with supply and demand in the housing market. 

Increasing Mortage Rates 

In addition to sky-high house prices, mortgage rates are also increasing steadily. Although there have been minor rate drops, the average trend is for the rate to increase steadily. In fact, the average rate on a 30-year mortgage loan has increased to 7.2% after five weeks of steady increase. 

The government has been increasing mortgage rates to slow the system and lower our out-of-control inflation. At the moment, both issues seem to be becoming unbearable. 

Combined with already high purchase prices, these unrealistic mortgage rates make the market nearly impossible to enter.

How Do People Feel About The Housing Market 

As you can probably assume, the housing situation in the U.S. isn’t very optimistic. According to a Gallup survey publicized by CNN, around 21% of Americans believe it is a good time to purchase a home. That leaves around 78% of our population feeling uneasy about the state of things. 

This is not a new phenomenon either, as 76% of Americans felt a similar level of anxiety just the year prior. 

Are Renting Prices Any Better? 

If buying a house isn’t ideal right now, does that mean renting is the best option? Not necessarily.

Similarly to mortgage rates and house prices, the average rental price has also risen in recent years. This is especially true for major cities such as Miami, Seattle, and New York. 

Similar factors impact the rate of rental prices: house availability, the market, and trends in the area. On top of this, other things, such as inflation, play an even more significant role, increasing the costs of maintenance, repairs, and general upkeep for landlords. In most cases, landlords pass these increased costs to renters through higher rental prices, contributing to the overall rise in average prices. In addition to simply being unreasonable, these increased prices can also cause a lot of disputes between landlords and tenants. 

Conclusion

In the end, the housing situation in the U.S. needs some significant changes. As it stands, almost all housing options have increased in price dramatically. From rising rental and house prices to elevated mortgage rates, new people are finding it nearly impossible to enter the market. Many people currently hope that efforts to reduce the impact of inflation will be successful, dropping rates to what we knew before the global pandemic.