WASHINGTON (February 6, 2020) – As home prices continue rising faster than wages in a majority of U.S. markets, the National Association of Realtors® and its 1.4 million members have made housing affordability a top advocacy priority in 2020. This topic was the focus of NAR’s second annual Policy Forum, hosted today at the National Press Club in Washington, D.C.
“As America confronts low housing inventory and a persistent lack of affordable housing options, NAR was grateful to bring together some of the brightest minds in our industry at today’s Policy Forum,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco. “With housing affordability set to be one of the defining policy issues of this decade, it is imperative for NAR – along with economists, lawmakers and other industry stakeholders – to lead discussions that will generate solutions to these far-reaching problems.”
Earlier this year, NAR Chief Economist Lawrence Yun released a report showing that major U.S. metro areas where housing affordability has worsened over the last five years have seen a corresponding drop in job growth. Specifically, housing affordability rankings have declined in 81 of 174 U.S. metro areas, while 34 regions are seeing job growth fall faster than the national average over the past five years.
“Job growth has slowed in these areas in part because limited supply is making homes less affordable,” Yun noted. “As inventory continues to decline and affordability worsens, workers and companies are less incentivized to do business here.”
Additional research conducted by Yun's team and announced on Thursday found that, from 1989 to 2019, 87% of home purchases in all major metro markets resulted in a positive housing equity gain for owners who held the property for 7–10 years.
While barriers inhibiting development remain, NAR has supported policies it believes could bring relief to the market. In response to HUD’s Request for Information on policies that “raise the costs of affordable housing and contribute to… low housing inventory,” NAR penned a letter arguing for improved FHA underwriting criteria that is more equitable for first-time homebuyers; incentivization of “Yes in My Backyard” markets to encourage states and localities receiving federal dollars to reform high-density zoning; and for additional Community Development Block Grants that encourage localities to update development plans and address barriers to housing affordability.
Separate NAR research unveiled on Thursday projects that $220 to $400 billion would be added to the economy if the pace of homebuilding and for-sale housing activity returned to a more normalized level, translating to 0.25% to 0.50% in added annual GDP growth over the next four years. NAR unveiled separate reports examining zoning, Accessory Dwelling Units and, most notably, a White Paper reiterating the case for homeownership while calling on Congress to restore homeownership incentives in the U.S. tax code.
“No longer providing a tax incentive for buying a home versus renting is a fundamental policy shift for tens of millions of households,” the White Paper reads. “A larger number of households in the middle-class, minority and millennial groups… continue to face the greatest headwinds to increased homeownership. In order to ensure U.S. tax policies support access to the American Dream of owning a home… it is imperative that homeownership… be incentivized in the federal tax system.”
This NAR and Rosen Consulting Group research argues that “sustainable and affordable homeownership” remains the best opportunity “most households will ever have to improve their long-term net worth and financial security.” Since 2013, the median family net worth for all homeowners has increased nearly 15%, while net worth declined approximately 9% for renter families over the same period.
The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.
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