You're Not Lazy, Homes Are Just That UNAFFORDABLE

Summary

This video script addresses the issue of home affordability in the United States, highlighting that 77% of households cannot afford the median-priced home according to the National Association of Home Builders. It refutes the notion that spending on non-essentials is the issue, instead pointing to high housing costs, strict regulations, and the impact of private equity on the rental market. The script discusses the National Home Builders Association's 10-point plan for affordability and shares a warning story from Jackson, Wyoming, where skyrocketing home prices have priced out locals, emphasizing the urgent need for accessible housing solutions.

Takeaways

• 🏠 77% of US households cannot afford the median-priced home according to the National Association of Home Builders.
• 📉 Despite 65.7% of Americans owning their own home, affordability remains a significant issue for the rest.
• 💰 The minimum income required to afford a $150,000 home at a 6.5% mortgage rate is around $45,900.
• 📉 There are 5 million US households with insufficient incomes below $4,975 to afford a $150,000 home.
• 💲 The national median home price for new single-family homes is nearly $500,000, making it unaffordable for many.
• 📊 34.9 million households, or 77%, cannot afford the median-priced home, even with slightly lower mortgage rates.
• 👫 An example of a young couple with careers as a school teacher and police officer shows the difficulty of affording a home on their combined income.
• 📈 The cost of building a house is affected not only by materials but also by land development, approval processes, and labor costs.
• 📋 The National Home Builders Association has a 10-point plan to address the affordability crisis by increasing housing supply and reducing regulations.
• 📈 The median list price in Jackson, Wyoming, rose 165% in less than two years, making it unaffordable for locals.
• 📝 Rent-to-own schemes can be deceptive, with high eviction rates and contracts that favor the companies over the potential homebuyers.

Q & A

What percentage of US households cannot afford the median-priced home?

77% of US households cannot afford the median-priced home.

What is the median price of a new single-family home in the United States?

The median price of a new single-family home in the United States is $495,000.

What is the minimum income required to purchase a $150,000 home with a 6.5% mortgage rate?

The minimum income required to purchase a $150,000 home with a 6.5% mortgage rate is about $45,900.

What are some of the main reasons cited for the unaffordability of homes?

The main reasons cited for the unaffordability of homes include the high cost of building materials, excessive regulations, labor shortages, and the rising costs of land development and approval processes.

How do mortgage rates impact home affordability?

Higher mortgage rates increase monthly payments, making it harder for people to qualify for and afford homes. Even if mortgage rates decrease slightly, many people still cannot afford the nearly half-million-dollar median home prices.

What are some of the key points in the National Home Builders Association's 10-point plan for affordability?

The key points in the plan include increasing the nation's housing supply, eliminating excessive regulations, promoting careers in skilled trades, fixing building material and supply chains, passing tax legislation to expand affordable housing production, overturning inefficient local zoning rules, alleviating permitting roadblocks, adopting cost-effective building codes, reducing local impact fees and taxes, and updating employment policies to promote flexibility.

How have home prices changed in Jackson Hole, Wyoming?

Home prices in Jackson Hole, Wyoming, rose from less than $1.1 million in January 2022 to $2.9 million in September 2022, a 165% increase in less than two years.

What challenges do people face with rent-to-own agreements?

Challenges with rent-to-own agreements include high annual increases in rent, predatory practices by private equity firms, and difficulties in maintaining consistent payments, which can lead to eviction and loss of invested money towards purchasing the home.

Why are more affordable neighborhoods being built as rentals rather than for sale?

Affordable neighborhoods are being built as rentals because it is easier for developers to navigate red tape and get permits quickly. Additionally, renting out properties can be more profitable for private equity firms and developers.

What impact does the unaffordability of homes have on communities and future retirees?

Unaffordability of homes leads to a greater divide between the 'haves' and 'have-nots,' making it difficult for essential workers to live near their jobs. It also reduces the opportunity for wealth building through homeownership, which can negatively impact future retirees who rely on home equity for their retirement funds.