Homeownership Increasingly Out of Reach

From the United States to the United Kingdom, housing costs are eating up a larger percentage of household income.

2 minute read

January 11, 2024, 7:00 AM PST

By Diana Ionescu @aworkoffiction

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eunikas / Adobe Stock

According to an article by Mark Edward Rose posted on the World Economic Forum site, “There are insufficient subsidized or social homes or 'attainable' housing options for low- and middle-income households.” As Rose points out, “Looking at the heatmap of nationwide rent burden in the U.S. below, a stunning proportion of the country sees at least 30% of households rent burdened. This indicates a critical lack of supply for a range of income levels.”

While the crisis in the United States is particularly severe, other countries face similar problems. “In England, data from the Office of National Statistics reveals that only the cheapest 10% of houses are now considered affordable for the middle-income bracket.” 

For many households, this means that renting is significantly cheaper per month than owning a home. “In the U.S., the cost of an average monthly home payment is now $3,322 – the average monthly new lease payment is almost $1,000 cheaper.”

According to Rose, there are four important ways the public sector can support more affordable housing. These include ‘sensible density,’ supporting the construction of denser housing in areas where it is feasible and appropriate; engaging the community to find locally sensitive solutions; implementing reforms such as reducing parking requirements that decrease the cost of housing; and building sustainable infrastructure to prepare neighborhoods for more density and protect cities from the impacts of climate change.

Tuesday, January 9, 2024 in World Economic Forum

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