We Asked: How Is The Homeownership Crisis Affecting You?

Originally published on August 13, 2018 11:13 am

People from nearly every state in the country responded to a request from NPR on social media to tell us about their experience trying to buy a home. From urban metro areas to distant suburbs, there were common themes of rising home prices coupled with limited options.

In a series of stories NPR has reported on a variety of factors that are contributing to this new housing crisis: a construction labor shortage, rising costs of building materials, a shortage of undeveloped land, and an increasing amount of regulation that limits housing development.

Among the many responses we received to our questions, the vast majority reported being unable to find a home that was affordable. Some had been searching for the right home for years. Others had given up the search, or moved to a new state to find the exact same housing market they'd tried to escape from.

While a six-figure household income might appear to make homeownership a guarantee, the rising cost of homes kept many in that income bracket shut out of the market.

That's not so surprising when you consider that the median price for a new home in the U.S. is above $300,000.

With a lack of new, affordable homes, respondents said they looked for lower-priced, older homes. But those homes often need renovations or upgrades that add to the total cost of the home.

It was common to hear that homes without updates for decades were selling for the same prices as homes that had already been renovated. Many people could not justify paying the high prices asked for outdated homes.

Many respondents from all over the country described bidding wars against other prospective buyers. This led to homes selling above asking price, oftentimes to buyers who had the cash to buy the homes in full.

Respondents who had to finance their new home simply couldn't compete with cash buyers. Many described having homes literally bought out from under them as they toured homes with Realtors.

The suburb, long the place where more affordable homes could be found, is making way for housing that is even more remote. But buyers had to decide whether housing affordability was worth spending hours a day driving to and from their jobs.

For those who did end up buying a home, there was a universal sense of luck and relief. Unless prices begin to drop, from increased housing supply or some other cause, many respondents were unsure how they would be able to get into homeownership.

Copyright 2018 NPR. To see more, visit http://www.npr.org/.

LAKSHMI SINGH, HOST:

Ten years after the collapse of the housing market in the United States, we have a new crisis on our hands. Buying a home is increasingly out of reach for a majority of Americans. All this week, NPR has been exploring the new homeownership crisis in this country - not enough homes being built and sky-rocketing costs. Economists and experts blame a number of factors for this. We have a labor shortage, rising costs of building materials, not enough land - just to name a few. A good deal of our reporting on this series was informed by you on social media. Here to share some of what we heard is NPR's Kirk Siegler. He's been the lead reporter on the housing series this week. Hello, Kirk.

KIRK SIEGLER, BYLINE: Hello, Lakshmi.

SINGH: So I gather you have been inundated with responses from listeners. Tell me what question were you hoping to answer out of all this.

SIEGLER: Well, we actually wanted to get a sense for how bad and widespread the problem really is. I mean, I spend a lot of time traveling out in the country, reporting on communities. And, you know, this is anecdotally one of the number one things I hear about - that people can't afford housing. And we were inundated by responses from people writing in from almost every state in the country, people writing in from small towns, big cities. And not just the expensive cities that you might think of when you think of a housing crisis here in California or New York or Washington, D.C., where you are.

And a story from a gentleman named Matthew Medvecki is one we heard a lot. He and his wife live in Sarasota, Fla. They've just recently started a family. They've got another child on the way, and they're about to outgrow their current house that they own. And they're thinking if they sell their house, they'd have a decent amount of money from it and they could find a new place. Well, not so fast, so let's hear from Matthew.

MATTHEW MEDVECKI: Housing prices have nearly doubled. And while that means that we have a lot of equity in this house, to just be able to increase like from a two-bedroom to a three-bedroom house is a huge leap for us.

SINGH: So they can sell their house, but they're unable to find anything else?

SIEGLER: Right. And $300,000, he said, is basically his cap. And his story is not unique. Interestingly, he used the first-time homebuyer tax credit that you may remember came from President Obama in 2009 after the crash. And he's achieved the homeownership dream, right? But in order to find something new that suitable, a place they want to move into for 10, 15 years and grow their family, is maybe 350 to 400,000 in their Florida community, and they just can't afford that much.

Lakshmi, we also heard just how crazy it is out there when you think you do have something that you want, and you're in the works, and you put the bid in, and you're outbid. Here's William O'Berry. He got in touch with us from Atlanta, and he had to go farther and farther out from the city, where he preferred to live in, to find something for $200,000 that he could afford.

WILLIAM O'BERRY: Just the process of like we went to go see this house, and it's either someone bought it out right from under us while we were visiting it, or we didn't have enough money to do the renovations and pay for the mortgage at the same time.

SINGH: That's one of the frustrating factors for anybody who's been through the home buying process.

SIEGLER: Exactly.

SINGH: I mean, we've talked about some of the economic reasons, the economic factors, for the housing shortage. What about the people who are relocating from one area to another? Maybe a big city and they're trying to get to a smaller city or town. I'm wondering, how much of a factor has that been in all of this?

SIEGLER: Right. So that was actually one of the reasons we started to look to do this series. Living here in California, you hear about people moving to Denver, Salt Lake City, moving east, where homes are cheaper. You sell your condo, say, in San Francisco for 3 million. Well, that goes a lot farther in a place like Boise.

So let me introduce you to Emily Burkhardt. She lives in Bozeman, Mont., an increasingly unaffordable place to live in a state that has some of the lowest per-capita income in the country. And she told us that in large part, tech workers were moving in. They're able to work remotely, or they're coming into a town like Bozeman with all of its amenities, and that's driving up prices.

EMILY BURKHARDT: And those are people that can sell their house in California, Seattle and Oregon for - their tiny house - for a lot of money and then come in here and buy a much bigger place.

SIEGLER: And so, Lakshmi, we're using these western cities as an example. But I don't have to tell you this is a crisis clearly affecting everyone everywhere.

SINGH: I mean, 10 years removed now from the last housing crisis. Now to face this new kind of a challenge of escalating housing affordability problems. I mean, this begs the question of what will become of homeownership in the United States. I mean, it has been such a big part of the American identity. It's part of the American dream to own your own home, finally. What do you think is being done to preserve that American dream?

SIEGLER: I don't want to say that it's all just crisis, crisis, crisis. There are communities and cities and states that are doing things to tackle this. A lot of people we talked to in this series - economists, and experts, and builders, and developers, and city leaders - especially in Boise, as an example - that told us that the private market is not going to do this on its own. There's going to have to be some sort of public intervention into the market to give incentives to developers to build affordable housing.

You know, there's just no clear sign that this market is going to get corrected anytime soon at least on the private market. In June, new housing starts - something the economists watch very closely. New housing starts - were actually down by an astounding 12 percent. And, you know, I think this latest housing crisis or affordability crisis we're looking at is causing - you know, you mentioned the American dream. It's causing a lot of people to question whether that's still attainable. You know, we hear all about how the economy is booming right now. But, you know, in reporting this series, it's clear that that is only the case for a certain number of people.

SINGH: That's NPR's Kirk Siegler talking about the homeownership crisis in America, 10 years after the collapse and the Great Recession. Thank you very much, Kirk.

SIEGLER: Glad to be here.

SINGH: And you can find links to all of our reporting from NPR and member stations KQED and Colorado Public Radio - including photos and charts, et cetera at our website, npr.org. Transcript provided by NPR, Copyright NPR.