The Housing Affordability Crisis: What can be done?
John Adams: Housing Affordability Crisis
Real estate expert John Adams joins Good Day Atlanta to talk about the housing affordability crisis and what the future holds.
ATLANTA - If you’ve been in the market to buy a house in recent years, you already know that housing affordability is in crisis—and it’s not getting any better.
So, how can we make housing more affordable, especially for first-time buyers? To get answers, we turned to Fox 5 Real Estate Expert John Adams.
Q: John, with housing prices sky-high and 7% interest rates on home loans, how can young couples ever hope to buy their first home? What can be done right now to address this problem?
A: You, and everyone else, are asking the same question!
Housing in the U.S. has become too expensive, making it increasingly difficult for many Americans to become homeowners. Home prices are rising faster than wages, leaving homeownership out of reach for many young people, middle-class families, and lower-income workers.
This crisis isn’t caused by just one factor—it’s a combination of economic trends, government policies, and housing shortages. Here’s what’s fueling the problem:
1. Home Prices Have Risen Too Fast
One major reason for this crisis is that home prices have increased faster than wages. Over the past two decades, housing costs have soared, while incomes have not kept pace.
At the same time, the cost of living has risen, making it even harder for renters to save for a down payment. Many renters are spending a significant portion of their income on housing, leaving little room for savings.
2. A Severe Lack of Affordable Homes
Another major issue is the lack of inventory. For years, not enough homes have been built, and strict zoning laws have made it harder to develop new housing.
Because of this shortage, prices continue to climb, forcing more people to rent instead of buy. Many builders focus on luxury apartments and high-end homes, leaving few options for buyers seeking affordable properties.
3. Economic Conditions Are Making It Worse
The overall economy is also a significant factor. Many potential buyers are struggling with student loan debt, inflation, and job uncertainty.
After experiencing past economic downturns, some buyers hesitate to take on a mortgage, fearing another financial crisis.
How Can We Fix the Housing Crisis?
While the issue is complex, there are solutions that could help make homeownership more accessible.
1. Build More Affordable Homes
The housing industry, along with HUD, must embrace modular housing as a viable homeownership option. The government should partner with builders to:
- Offer tax breaks and grants for affordable housing development.
- Streamline zoning laws to encourage modular construction and multi-family housing.
- Make the construction permit process easier and faster.
2. Help People Afford Homes
Expanding down payment assistance programs, providing tax credits for first-time buyers, and increasing funding for low-interest mortgages could make homeownership more attainable.
Additional housing vouchers and rent assistance would also help renters transition into owning a home.
3. Encourage Investors to Sell Rental Homes
Current tax laws discourage small landlords from selling rental properties—at a time when the market desperately needs more inventory.
- Eliminating capital gains tax and depreciation recapture could encourage "mom-and-pop" landlords to sell their rental properties, which are often entry-level homes perfect for first-time buyers.
- Offering landlords a bonus for providing owner financing could also make homeownership more accessible.
The Bottom Line
The housing affordability crisis is real, and if left unaddressed, an entire generation may struggle to achieve homeownership.
This is not an acceptable situation—but there are ways the government can help without picking winners and losers.
We must take action to ensure that the average American has the opportunity to buy a home and achieve the American Dream.
About John Adams
Atlanta native John Adams has been a real estate broker and investor for four decades, experiencing the ups and downs of the market.
He hosts "The Real Estate Coffee Break" every Saturday at 11 a.m. on www.LibertyREIA.com.
John firmly believes that, for most Americans, the best investment they will ever make is their own home.