A new national survey of consumers commissioned by the MacArthur Foundation uncovers the depth of concern over America’s crisis in housing affordability, provides provocative insights into how a large number of Americans perceive the housing economy and outlines support for public policy solutions.
The study found that eight out of ten Americans (81%) believe that housing affordability is a problem in America today, and one out of three (37%) said it is a very serious problem—about the same findings as a MacArthur Foundation survey taken a year ago. One out of four consumers (24%) has had to take a second job to pay their rent or mortgage, a 3 percent increase over 2015, and 19 percent have had to stop saving for retirement, a 2 percent increase over last year’s findings.
Having stable housing that is affordable ranked second, behind having a stable, decent paying job, as very important for a middle-class lifestyle (85%), yet 68 percent said finding stable housing that is affordable is becoming harder compared to previous generations.
Some 60 percent believe finding quality housing to buy today is somewhat or very challenging, slightly higher than the 58 percent who think finding rental housing is challenging. More consumers feel very stable and secure in their current housing (58%) than a year ago (53%).
The Housing Crisis is Not Over
Though most policy makers, economists, and professionals in real estate and mortgage finance believe the housing crisis that resulted in plunging values and 7 million foreclosures is now past us, consumers disagree. Many feel that the lack of affordable housing they are experiencing today is a continuation of the events of 2007 and 2008.
Nearly half of consumers (44%) think that we are still in the middle of the housing crisis that began in 2008 when many people and families defaulted on their mortgages and lost their homes. Only 29 percent think that the crisis is over, and 19 percent think the worse yet comes. Over the past year, the belief that that housing crisis is continuing increased; in 2015, 35 percent said we were still in the middle of the crisis, and 41 percent thought the crisis was over.
Asked to rank reasons for changing housing policy, three out of four participants said the following statement was a very or fairly important reason for action: “According to experts, the housing market is in full recovery, but the average American family is not feeling the recovery. In communities throughout the country, home sales and rental prices are increasing at a much faster rate than wages and incomes. Nearly forty million households in America spend more than thirty percent of their income on housing.”
Growing Support for Homeownership
The housing crisis changed the way millions of Americans thought about homeownership, especially as an investment, but the MacArthur Foundation study tracks how support for homeownership is increasing as the foreclosure headlines fade into memory.
- Seven out of ten renters (69%) aspire to homeownership;
- Support for homeownership as an investment is increasing quickly. Compa5ed today 50 percent in 2014, today 60 percent of participants believe that buying a home is an excellent long term investment because it is likely to increase in value over time and it is one of the best ways for people to build wealth and assets. The percentage that believes homeownership is no longer an excellent long investment and one of the best ways for people to build wealth has fallen from 43 percent in 2014 to 33 percent today.
- Revising the federal income tax code so that more families with incomes from forty thousand dollars to seventy thousand dollars receive tax benefits intended to help them purchase homes ranked first among eight possible policy solutions to address the problem of housing affordability. Some 81 percent of respondents support it, even though only 63 percent of survey participants were homeowners.
Opportunities for Action
The study provided instructive input from consumers how they think policymakers in Washington can help to make housing more affordable.
- Nearly two out of three (63%) said a great deal or a fair amount could be done to solve the problem of housing affordability; and
- Nearly two-thirds, 63 percent, said issues of housing affordability are not getting enough attention in the Presidential election campaigns.
In addition to revising the tax code to help families buy homes, the next three most popular policy proposals to address housing affordability were:
- provide housing assistance to families earning less than $30,000 a year (80% favor);
- allow developers to build more housing if they provide units for families earning less than $50,000 (79% favor); and
- expand federal programs to ensure that low-income families with children under age eighteen receive some assistance (76% favor).