In March 2024, the National Association of Home Builders (NAHB) released a report that paints a grim picture of housing affordability in the United States. According to the study, nearly 77% of U.S. households—equating to 103.5 million homes—are unable to afford a median-priced new home, currently priced at $495,750. The report highlights that even minor increases in home prices or mortgage rates could push even more Americans out of the housing market. A $1,000 increase in home prices would price out an additional 106,031 households, while a 0.25% rise in mortgage rates would impact 1.1 million households.
Similarly, in Canada, housing affordability has become an urgent issue. Despite the Bank of Canada’s recent interest rate cuts, the outlook remains bleak for many Canadians. Rising housing costs have left many with less disposable income, adversely affecting their economic outlook. In January 2024, concerns about housing affordability surpassed inflation as the top issue for Canadians.
Canada is also losing affordable rental units at an alarming rate. Research shows that between 2011 and 2016, the number of rental units affordable to households earning less than $30,000 annually decreased by 322,600. This shortage, coupled with significant rent increases when units turnover, is forcing many Canadians out of their homes and communities.
Both in the U.S. and Canada, the lack of affordable housing is exacerbating economic challenges for millions, making the dream of homeownership increasingly unattainable.
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