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Regulations, Tariffs, and Affordable Housing

The National Association of Home Builders (NAHB) reports that increasing regulatory costs, the shortage of construction workers, tariffs on $10 billion worth of building materials, and concerns over housing finance have impacted housing affordability.

According to the report, regulations account for 25% of the price of a single-family home, and 30% of the cost of a multi-family development.

“Removing regulatory barriers that contribute to the increased costs of housing will pave the way to homeownership,” said NAHB Chairman Greg Ugalde, a builder and developer from Torrington, Connecticut. “Home builders and the residential construction community are committed to working with Congress to ensure homeownership is within reach of hard working families.”

The latest NAHB/Wells Fargo Housing Opportunity Index found that 61% of new and existing homes were deemed affordable. The current homeownership rate of 64.2% remains below the 25-year average of 66.3%, according to the U.S. Census Bureau’s Housing Vacancy Survey.

Home buyers stated in an NAHB analysis that high home prices remain a barrier to homeownership. Seventy-eight percent of buyers estimated they could afford fewer than half of the homes for sale in their markets. The NAHB states 53% of buyers seeking a home in Q1 2019 have been searching for three months or longer.

The analysis found that seniors are most likely to be actively searching for a home at 56%, with 50% of millennials actively looking to buy a home. Baby boomers have the lowest share of people actively searching for a home at 41%. Potential buyers within Gen X came in at 42%.

Despite affordability concerns, the NAHB states younger generations are optimistic about finding a home. The report states that 23% of millennials, 22% of Gen X’ers and 20% of seniors expect house hunting to become easier in the future. Baby boomers (18%) were the least optimistic about the prospects of finding a new home.

The NAHB also states about 20% of millennials have plans to purchase a home in the next year.

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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