The housing accessibility crisis is reshaping the residential landscape in the United States. The core contradictions focus on three aspects: the growth rate of housing prices far exceeds the income level, the rigid rise of construction costs, and the intensification of policy constraints leading to insufficient supply. Data shows that from 2019 to 2022, the cumulative increase in housing prices was 59.1%, while household income only slightly increased by 4.5% during the same period, and the deterioration rate of the price to income ratio reached a 40-year-high.
Data pivot:
The housing gap in the United States exceeds 1.5 million units, with a gap rate of 37% in some regions
The NEAR Housing Burden Index has plummeted from 148.2 in 2021 to 99.3 in Q3 2024
Annual increase of 6% for homeowner insurance, reaching 12-15% in high-risk areas such as Florida
The proportion of monthly mortgage payments to income has exceeded the 31% warning line, with some markets exceeding 50%
Policy variable analysis:
1. Loosening regulations
The compliance cost of construction has pushed up the housing price by 93800 US dollars per unit, accounting for 23% of the selling price. The federal land release plan can increase supply, but it requires supporting infrastructure investment of 200 billion yuan. At the local level, it is necessary to break the NIMBY (Neighbor Avoidance Effect) dilemma and pilot the "business to residential" conversion model.
2. Interest rate game
Ernst&Young predicts a 75 basis point interest rate cut by 2025, but mortgage rates will still remain at a high level of over 5.5%. Interest rate sensitivity analysis shows that every 25 basis points reduction in interest rates can release 120000 units to improve demand, but the "interest rate lock up" effect still restricts 15% of potential transactions.
3. Tariff impact
The proposed import tariffs on building materials may increase construction costs by 8-12%, directly affecting 90% of developers' profit margins.
4. Labor force restructuring
The proportion of immigrant workers in the construction industry is 31%, and the proportion of immigrants in key positions such as plasterers reaches 64%. Expelling undocumented workers will result in a 25% increase in labor costs and a 30-day extension of construction periods. The proportion of illegal workers in the construction industry in Texas, New York and other places exceeds 40%, and there are systemic risks in policy adjustments.
5. Tax reform
The countdown to the expiration of TCA terms brings three major variables:
The adjustment of the upper limit of property tax deduction affects 14 million middle-class households
The change in the threshold for deducting mortgage interest affects 35% of first-time buyers
Capital gains tax reform or release 2 million investment properties into the market
Industry adaptation strategy:
▶ Product Innovation: The average area of single family homes has decreased by 18% in three years, and the proportion of multi generational housing units has increased to 27%
▶ Technological breakthrough: Prefabricated construction reduces construction cycle by 40%, 3D printing technology reduces main structure costs by 65%
▶ Rent to sell conversion: Institutions hold 14.3 million rental housing units, and BTR community rents are 15-20% lower than traditional apartments
Intergenerational differentiation intensifies:
The median age of home purchase for millennials/Z generation has been postponed to 34 years old
The proportion of rental households has risen to 37%, reaching a new high since 1985
The rental to purchase savings cycle has been extended to 8.3 years, an increase of 2.5 years from ten years ago
Breakthrough path deduction:
1. Establish a 50 billion yuan housing fund at the federal level to provide targeted subsidies for down payments
2. Simplify the approval process for affordable housing and shorten the development cycle to 12 months
3. Promote the pilot program of legalizing construction labor and fill the gap with 230000 skilled workers
4. Implement differentiated tax rate policies to stimulate the development of small and medium-sized housing units
The current policy window is less than 18 months, and the industry consensus is that a systematic solution needs to be developed before 2025. The developer's gross profit margin has been compressed to a historic low of 12.8%, and any single breakthrough is difficult to reverse the predicament. The future market may present a new ecology of "rental dominance, gradient supply, and technology driven", and the solution to the issue of housing accessibility is shifting from an economic issue to a social governance proposition.
