Together, We Can Make Housing More Affordable

Over the years, the inventory of affordable U.S. homes has declined sharply as home prices have dramatically risen. As housing has become increasingly unaffordable, the shortage of safe and affordable homes is affecting more and more prospective homebuyers every day.

The potential impacts go beyond individual would-be homeowners, with growing implications for society at large. This problem has no one solution, but through collaboration across the entire housing industry, together we can create more opportunity for more people to achieve sustainable, long-term homeownership.

Research shows that successful homeownership has many benefits for the economy. For example, we have seen that homeowners are more likely to invest in their area’s economy, get involved in local government and pass on more wealth to their children. As average wages have increased by only 16% since 2012 while national home prices increased by 47%, the impact on long-term, intergenerational economic well-being could be substantial.

Only 31% of prospective homebuyers aged 25-34 are confident that they will be able to find a home in their price range. Compared with previous generations, Millennials and Gen Z are entering the market with larger amounts of debilitating debt, which – along with the fact that jobs are often concentrated in high-cost areas – is delaying homebuying significantly. The rise of Covid-19 also presents major challenges: In a recent Fannie Mae survey, 40% of current renters reported that the pandemic has had a strong impact on their overall financial health.

At the same time, census reports clearly illustrate the very real effects of racial inequality in housing. According to the U.S. Census Bureau, between 1994 and 2019, Non-Hispanic White homeownership rates hovered between 70% and 80%, while rates for Hispanic and Black people remained between 40% and 50%. As Fannie Mae CEO Hugh Frater states, “Fannie Mae understands the story of housing in America includes a history of systemic racism, and we know our role in housing finance brings important responsibilities.”

So, what can we do to help solve these problems? Let’s share ideas, start conversations, and work together to make housing more affordable.

Fannie Mae believes that housing should be attainable and sustainable for all. That’s why we’re dedicated to working with our industry partners and community organizations to achieve this common goal. Here is how we’re putting this plan into action:

Visit FM.FannieMae.com/Affordable and read more about our plan to make housing affordable.

See our infographic to learn more about why housing affordability matters.

Sources:

Fannie Mae, “Future Homebuyers,” Single-Family Strategy & Insights unpublished research (November 2019). | Fannie Mae, “Builders,” Single-Family Strategy & Insights unpublished research (December 2019). | “The Decennial Census & American Community Survey,” U.S. Census Bureau. | Hayward, “How Zoning Laws Exclude Black Families from Areas of Economic Opportunity,” Fortune (July 2020). | DiPasquale & Glaeser, “Incentives and Social Capital: Are Homeowners Better Citizens,” Journal of Urban Economics, (1999). | Evangelou, “Wage Versus Home Price Growth,” National Association of Realtors (March 2019).