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What Other Challenges Exacerbate the Affordable Housing Crisis?

New Season: The U.S. Housing Supply Crisis: Homeownership Demand Challenges

Hi! I’m Pete Carroll, executive of public policy at CoreLogic. Welcome to season two of our series exploring the affordable housing crisis in the U.S.

As a recap, in the first season, we talked about the “supply” issue—namely, the Housing Supply Gap. We took a deep dive into challenges surrounding just the sheer number of homes we are lacking in the United States. This is, by far, the biggest challenge facing homeowners today.

But it’s also not a complete picture. This season, we’ll explore the “demand” side. These are barriers that prospective homeowners face along their journey in pursuing the American dream of affordable homeownership.

So, we’ll start off by reviewing these homeowner “demand” challenges, including restoring trust in the U.S. homeownership system and identifying new opportunities to create responsible, yet affordable mortgage financing.

When we talk about the Housing Supply Gap, we mean the current and annual ongoing undersupply of new housing units needed for a healthy housing system in the U.S. In simpler terms, there aren’t enough homes for the amount of people who need them. But as we briefly touched on, it’s not all about how home builders add new supply into the U.S. housing system. It’s also about homeowner demand.

Specifically, do prospective homeowners have adequate access to responsibly underwritten mortgage loans, and do these homeowners trust a housing ecosystem that failed too many, particularly following the financial crisis of 2008? How do we restore trust in the benefits of homeownership? And how do we find the trifecta of accessible, affordable, and responsibly underwritten mortgage financing?

These questions touch on the crux of the holistic affordable housing crisis. Even if we can improve construction innovation, utilize big data, pass grants and tax credits, and close the housing supply gap, it is meaningless unless people have the ability to move into these homes in the first place.

Addressing this demand-side issue with meaningful action is crucial because homeownership has proven to be among the most effective multi-generational wealth creation opportunities that families can pursue. The more people who can secure reliable financing for homes, the more money they can save—which they can pass onto their children, their children’s children, and give everyone a better life. To be sure, it is merely the sound of one hand clapping if all we do is add new housing units to the system, but do not also provide the tools necessary to put homeownership into the hands of the people who need it the most: low-to-moderate income persons, who are disproportionately people of color.

Like all problems, this, too, is solvable. With the right technology innovation, and the partnership and communication of all stakeholders, we can close the Affordable Lending Gap.

Thanks for tuning into this episode of “The U.S. Housing Supply Crisis: Homeownership Demand Challenges.” For more information about the property ecosystem, visit corelogic.com/intelligence. Otherwise, make sure to like, leave a comment and subscribe, and we’ll see you in the next episode.

© 2021 CoreLogic, Inc., All rights reserved.

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