Monthly housing payments should not exceed 30% of a household’s income, according to personal finance experts. However, this ideal simply is not possible for a large swath of people in many areas of the United States. Here’s a look at some reasons an affordable housing crisis exists and how some people deal with it.
Wages for some jobs have remained stagnant for several years. For decades, many people have had to take second jobs to pay their housing bills, and sometimes even that is not enough. Income in general is harder to come by for demographics such as Millennials. They live with their parents for longer and rent before searching for their first starter home.
The country has a tight supply of available housing with increasing demand. One reason is that senior citizens are living at home longer. Homes that would have ordinarily gone on the market remain locked up. Meanwhile, more Baby Boomers are divorcing, and each spouse needs his or her own place. Yet other Boomers are downsizing and competing for starter homes.
Natural disasters such as fires and floods also lead to housing shortages. For example, it can be difficult to find affordable apartments in Houston TX after a major flood. Waiting lists for public housing in the city have exploded, and FEMA programs help for only so long. Some renters cope by moving in with family members, with a lot of people living under one roof.
The affordable housing crisis is an issue with many roots. Different types of weather disasters seem all but certain in the years to come, and senior citizens will continue to living longer. Economic issues such as the rising cost of construction materials may further increase the price of future housing. Home developers tend to focus more on higher-end homes than on entry-level housing.