We Don't Have a Housing Shortage. We Have a Paycheck Shortage.

Recent polls show 54% now consider housing unaffordable and the cost of homeownership dominates Americans’ economic anxieties. The popular “abundance” narrative says there’s a housing shortage and suggests cutting zoning or environmental rules will let us build our way out of it. But we don’t have a simple net shortage of units—we have a deep mismatch between what gets built and what workers get paid. After 50 years of wage stagnation, the median mortgage payment is over $2,200 while median weekly earnings are $1,200. That’s a gap deregulation or more luxury condos won’t close. The solution isn’t to just build more. It’s also to pay people more.
END NOTES:

• To be considered affordable (30% of income) the median mortgage of $2,259 (bankrate.com/mortgages/average-monthly-mortgag…) would require weekly earnings of $1,737. But the median weekly wage for full-time workers is $1214 (bls.gov/news.release/pdf/wkyeng.pdf).

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Where is the Housing Shortage? (tandfonline.com/doi/full/10.1080/10511482.2024…) Of the nation’s 381 metropolitan areas, only four experienced a housing shortage between 2000 and 2020. (Op-ed from the author (barrons.com/articles/housing-crisis-build-more…) in Barron’s here.)

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The US Housing Crisis is Really About Low-Wage Jobs (bloomberg.com/opinion/articles/2024-07-09/us-h…). Kathryn’s take from 2024 in Bloomberg Opinion.

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Rate of U.S. homeownership (fred.stlouisfed.org/series/RHORUSQ156N) has been climbing since bottoming out in 2016 (Federal Reserve Bank of St. Louis).

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Mortgage Debt Service Payments as a Percent of Disposable Personal Income (fred.stlouisfed.org/series/MDSP) is about what it was in 2019 (Federal Reserve Bank of St. Louis).

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Median Sales Price of Houses Sold for the United States (fred.stlouisfed.org/series/MSPUS) shot up about $90,000 from 2019 to 2025 (Federal Reserve Bank of St. Louis).

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Housing Affordability and Housing Demand (frbsf.org/research-and-insights/publications/e…) (Federal Reserve Bank of San Francisco)

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