Housing Affordability Challenges in 2024: The Path Forward

2024 has put housing affordability squarely in the spotlight. The issue is no longer a distant problem—it’s here, and it’s significant. Families are feeling the strain from rising rents, high home prices, and a housing shortage of 4 to 7 million homes. These numbers represent real challenges for people across the country.

Renters are particularly impacted, with many spending over 30% of their income on rent in urban areas. This leaves little room for other essentials. For potential homebuyers, elevated mortgage rates have made purchasing a home more difficult than it’s been in years. Existing home sales have dropped to levels not seen since the mid-1990s, highlighting just how tough the market is right now.

However, there’s some good news. Housing affordability became a key issue in the 2024 presidential election. There were proposals for more down payment assistance programs and tax incentives for builders to create more affordable housing. President-Elect Trump has emphasized reducing regulations and opening federal land for housing development. The best part of all this is that, finally, housing seems to be getting the attention it deserves and is badly needed.

Communities are also stepping up with innovative solutions. Tiny home villages and modular housing projects are helping to address affordability and homelessness. By late 2024, a slight increase in housing inventory began giving buyers in some markets more options and reducing some of the competitive pressure. Some markets continue to remain ultra-competitive, with little to no inventory available for first-time buyers. At least, it seems that housing is starting to give way just a little.

Mortgage rates are starting the year above expectations. Numerous articles have stated that 2025 rate predictions are already wrong. We must step back and recognize that this is a brief moment in time. The last week of 2024 and the start of 2025 do not define the market or interest rates for the year. Unfortunately, the media quickly created negative headlines for the 2025 story on interest rates and housing, even before it began.

The housing challenges won’t resolve themselves overnight, but there is the beginning of momentum. Policymakers, businesses, and community leaders are working together to tackle the issue. The challenges will be addressed gradually with continued focus and collaboration, creating a more accessible and sustainable housing market.

The road ahead may not be easy, but there is real potential for meaningful progress.