Affordability Issues in United States Housing Market After Pandemic

affordability in housing The US

The coronavirus pandemic affected almost every aspect of our lives, and the housing market in the United States was no exception. We were suddenly confined to our homes, so large spaces appreciated and there was a wave of relocations.

Homework, now adopted as a permanent lifestyle, caused workers to migrate to smaller cities where big houses are more affordable.

According to realtors, during 2021 high-tax cities will continue to experience a brain drain as people move looking for cities with a lower cost of living.

Demand for real estate remains strongest in outlying suburbs and more affordable metropolitan markets, while in Large Central Metro counties, demand is lower.

This phenomenon meant that the more expensive the rent of a city was before the pandemic, the more likely it was to decrease. Conversely, the cheaper a city was before the pandemic, the more likely rents were to go up.

Home price growth in affordable US cities like Detroit, Cleveland and Baltimore is outpacing price growth in New York City and San Francisco.

For example, apartment prices for rent in Broward County, Florida, decreased by -0.40% during 2020. The difference in neighboring Miami-Dade County was even higher: renters benefited from lower urban prices by -8.60%.

This change in the price of renting and selling homes, added to the working conditions from anywhere, cause some headed south for more favorable climates.

The move of companies from other parts of the country, especially technology companies, that have decided to establish their headquarters here, brings jobs, but also more demand for existing homes.

Miami-Dade County is among the top 5 most popular destinations in the US, and this, precisely, makes the area more popular and expensive than the national average. A recent report from Harvard University said that Miami, Fort Lauderdale and West Palm Beach denote the highest percentage of people in the US who spend more than half of their income to pay rent.

Though, occupancy rates remain important to homeowners and the demand for rental units will continue in South Florida due to the affordability crisis and rising home values ​​in the national average.

In April 2021, rental prices in South Florida suffered a setback, increasing 3% more than in April of last year. The real estate market in South Florida now favors those who want to sell their home.

Beyond our privilege, in 2020, rents increased the most in less prosperous urban areas and less prosperous rural areas; according to a Zumper research on housing affordability.

This is a setback for millions of underserved minority Americans, including our Millennial generation as well, the poorest generation in recent history.

Our generation hardly owns a home and they don't have financial assets either. However, we do have a significant burden of debt, especially consumer credit to buy goods and services that will not generate a return in the future.

It was hard enough for buyers at the lower end of the economic ladder to find a home, now it is even more so with rising home prices in low-income counties.

If we consider that the Covid-19 pandemic led to small business closures and job losses, we find that housing has become less affordable for low-income Americans and communities of color due to unemployment and financial difficulties.

Realtors agree that affordability is the biggest obstacle in the housing market for 2021, and the main reason for a possible housing slowdown this year.

House prices have pushed new limits as buyer demand continues to rise.

Some sectors, such as single-family rentals, are supposed to prosper, but consumer confidence in the housing market fell in February this year.

Overall, the coronavirus pandemic and subsequent recession had a much greater impact on lower-income Americans than on higher-income Americans.

Rents rose for the inhabitants of rural areas and peripheral cities, precisely those with the lowest income. This deepened social inequality in the United States, and the American Rescue Plan might not be enough.


Jessymar Daneau Tovar

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