Housing Fuels the Economy


Housing is central to American family life and critical to a thriving economy. The state of the housing industry is a good barometer of the broader economy and the condition of the nation's social fabric.

Use the map to see how your state and local area are doing in terms of new home production, housing affordability, remodeling activity, and other benchmarks.

Choose a state to learn more

Housing and the Economy

Homes are much more than mere shelter

They are at once critical to every community and an engine of economic growth.

Building 100 single-family homes generates:

An icon depicting a briefcase and identification badge

297

jobs

An icon depicting a stack of dollar bills

$28 M

in wages and business income

An icon depicting the United States Capitol dome

$11 M

in taxes and revenue for state, local, and federal government

Source: NAHB analysis of government data

Current policy issues

At any given time federal regulators are working on dozens of rules that can have significant impacts on the viability and costs of housing projects around the country. This sections looks at just four of those issues – housing finance, resiliency, regulatory reform and tax policy – with an overview of the challenge and proposed solutions that could benefit small businesses and consumers alike.

Congress must reassert meaningful oversight authority over, and ultimately fix, our broken regulatory rulemaking system. Any overhaul must acknowledge the disproportionate compliance burden small businesses face.

On average, almost 25% of the cost of a typical new single-family home — close to $85,000 — is due to government regulation.

Reasonable regulations are essential to protecting health and safety. However, many regulations are imposed by unelected bureaucrats who establish laws far beyond Congress’ original intent.

What’s more, legislators often fail to see how countless layers of regulation imposed by numerous and varied agencies slow the economy, prevent families from achieving homeownership and harm small businesses.

The administration must immediately resume negotiations to craft an equitable, long term solution to the ongoing trade dispute over softwood lumber imported from Canada.

Since the beginning of 2017, rising lumber prices — exacerbated by 20 percent protectionist tariffs imposed on softwood lumber imported from Canada — have added about $7,000 to the price of a typical single-family home and more than $3,000 to the price of an average multifamily unit.

Roughly one third of the lumber used in the U.S. is imported from Canada because domestic producers do not have the capacity to meet demand. An equitable, long-term solution to this trade dispute will ensure that American home builders and consumers have access to a reliable supply of softwood lumber at reasonable prices.

Such a solution will also boost housing affordability and help to ensure that housing continues to fulfill its important role in driving the nation’s economy.

Congress must ensure the mortgage interest deduction remains a meaningful homeownership incentive for middle-class households, and also that the production of affordable rental housing continues under the Low Income Housing Tax Credit.

Even though the Tax Cut and Jobs Act of 2017 has been signed into law, much remains unsettled in U.S. tax policy. As the measure is implemented, federal legislators will get a sense of what needs to be revised or refined.

While the new law maintains the mortgage interest deduction, it reduces the number of households that will claim the deduction. This will affect home prices, potentially harming millions of American families.

Also important are tax credit programs that encourage production of housing for low- and moderate-income households.

Measures to ensure resilience in communities, infrastructure and buildings must be practical, cost effective and based on sound science. Such efforts should be coordinated between various levels of government, communities and businesses to prevent conflicting or duplicative requirements.

An unusual number of significant natural disasters in recent years and concerns over climate change have prompted consideration of resiliency at every level of government.

Resiliency plans, policies and programs will significantly affect how and where new homes and communities are built and greatly influence how cities and existing structures are re-engineered, rebuilt and/or remodeled.

Retrofitting and improving the existing housing stock and commercial inventory should be a priority. Newer homes and businesses constructed to more updated code requirements have proven to be more resilient in recent disasters. State and local communities should have the flexibility to adopt codes that address their resiliency priorities.

Remodeling activity and production of multifamily housing have similar impacts on the local economy.

The National Association of Home Builders (NAHB) is a federation of more than 700 state and local associations seving more than 140,000 members. About one-third are home builders and remodelers. The rest work in closely related fields that support the housing industry.

NAHB works hard to protect homeownership and rental housing opportunity.

A Growing Housing Affordability Crisis Is Affecting Low- and Moderate-Income Families Create report

Affordability Challenges And Opportunities

Four out of five American households believe the nation is suffering a housing affordability crisis. They see varying degrees of merit in some of the proposed solutions.

Americans have different views on the extent of the affordability problem and the potential solutions.

Percent of Americans who say housing affordability is a problem in the United States:

The United States
  • 57%
  • 23%
  • 6%
  • 14%
Their state
  • 47%
  • 31%
  • 9%
  • 13%
Their city
  • 43%
  • 32%
  • 14%
  • 11%

Major problem

Minor problem

Not a problem

Don't know / Not sure

Percent of Americans who say that one of the following major political parties, if either, is more likely to take action to reduce the cost of housing in the U.S.:

36%

Democratic Party

21%

Republican Party

24%

Neither party

Strongly support

Somewhat support

Somewhat oppose

Strongly oppose

Don't know / No opinion

Percent of Americans who say they support or oppose increasing estate taxes on the richest Americans to pay for construction and rehabilitation of more rental housing that is affordable to lower income families:

  • 33%
  • 24%
  • 13%
  • 16%
  • 14%

Percent of Americans who say they support or oppose reducing regulations, such as restrictive zoning and permitting procedures, that increase the costs of constructing new homes:

  • 21%
  • 31%
  • 17%
  • 10%
  • 21%

Percent of Americans who say they support or oppose providing grants to families in areas historically affected by housing discrimination to assist with down payment on a home:

  • 30%
  • 32%
  • 12%
  • 10%
  • 16%

Percent of Americans who say they support or oppose expanding government programs to increase the supply of affordable rental housing:

  • 33%
  • 31%
  • 12%
  • 10%
  • 13%

Some states have recently introduced laws that prohibit local governments from requiring non-essential features (such as brick instead of vinyl-siding, or a two-car garage) on the construction of new homes.

Some people say local governments should not be allowed to require non-essential features on new homes. Requiring builders to use more expensive finishes will just raise the price of already-expensive housing and price entry-level buyers out of the market.

Other people say local governments should be allowed to require non-essential features on new homes. Imposing certain cosmetic or ‘curb appeal’ standards during the construction of new homes will safeguard the value of current residents’ property.

Strongly support

Somewhat support

Somewhat oppose

Strongly oppose

Don't know / No opinion

Do you support or oppose laws that prohibit local governments from requiring non-essential features, such as brick instead of vinyl siding, or a two-car garage, on the construction of new homes?

  • 18%
  • 24%
  • 19%
  • 14%
  • 25%

This poll was conducted for NAHB by Morning Consult from August 9-24, 2019, among a national sample of 19801 Adults. The interviews were conducted online. State and district level results are estimates produced by a model known as multi-level regression with post-stratification (MRP). Prior to model estimation, the data were weighted to approximate a target sample of Adults based on age, race/ethnicity, gender, educational attainment, and region. Results from the full surveys have a margin of error of plus or minus 1 percentage points.

Data is Key to Understanding and Predicting Markets Create report

The Data Tells a Story

Housing starts, new home sales and other housing benchmarks can be valuable tools in analyzing housing market dynamics and consumer behaviors, and making reliable market projections.

NAHB’s proprietary analysis tools, including the Housing Market Index and the Housing Opportunity Index, are among the industry’s most important market benchmarks.

The State of Housing


$71,062

Median family income

A pie chart showing 63 percent

63%

Home ownership rate

135,702,775

Number of housing units

A pie chart showing 45 percent

45%

Minority (Hispanic or Non-White) home ownership rate

$205,000

Median value of owner-occupied homes

3,844,264

U.S. residents working in residential construction

$205,000

Median value of owner-occupied homes

3,844,264

U.S. residents working in residential construction

A pie chart showing 61 percent

61%

of all U.S. homes are single-family detached

A pie chart showing 6 percent

6%

of all U.S. homes are single-family attached

A pie chart showing 26 percent

26%

of all U.S. homes are multifamily

A pie chart showing 6 percent

6%

of all U.S. homes are other types of housing units

The State of Rental Housing


A pie chart showing 6 percent

6%

Rental vacancy rate

$981

Median gross rent

A pie chart showing 50 percent

50%

Gross rent is less than 30% of household income

A pie chart showing 25 percent

25%

Gross rent is 30% to 50% of household income

A pie chart showing 25 percent

25%

Gross rent is 50%+ of household income

A pie chart showing 6 percent

6%

Rental vacancy rate

$981

Median gross rent

A pie chart showing 50 percent

50%

Gross rent is less than 30% of household income

A pie chart showing 25 percent

25%

Gross rent is 30% to 50% of household income

A pie chart showing 25 percent

25%

Gross rent is 50%+ of household income

Source: U.S. Census Bureau’s 2016 American Community Survey

A Growing Gap Between Incomes and Housing Costs

The rising cost of housing is hurting American families

Housing affordability is an increasingly serious problem in communities across America.

Nearly a third of America’s 119 million households are cost burdened and pay more than 30 percent of their income for housing, according to NAHB analysis of data from the Census Bureau’s 2017 American Community Survey. That number includes almost half of the nation’s renter households and a quarter of the owner households.

A mix of regulatory barriers, ill-considered public policy and challenging market conditions is driving up costs and making it increasingly difficult for builders to produce homes that are affordable to low- and moderate-income families.

Regulatory requirements alone account for about 25 percent of the cost of constructing a single-family home and roughly 30 percent of the cost of a multifamily unit. And every day, builders grapple with increasing construction material costs, a shortage of skilled workers and a dwindling supply of developed lots. Restrictive policies that limit or even prohibit various types of homes and make large areas off-limits to new construction contribute significantly to the problem.

Choose a state to learn more

to see results of a national housing affordability survey conducted Nov. 27-30, 2018

How affordable is housing in America?

57.1%

Roughly 57.1% of homes in America are affordable to a family earning the national median income, as of the second quarter 2018.

20 Million

More than 20 million renter households in the U.S. are housing cost burdened, meaning they spend more than 30% of income for housing.

$217,000

The median value of owner-occupied homes in the U.S. is $217,600.

$12,600

The median value of owner-occupied homes increased from $205,000 in 2016 to $217,600 in 2017. That’s an increase of $12,600 – roughly 6% – in one year.

50%

Roughly 50% of renter households in the U.S. spend more than 30% of their income for housing.

$217,000

The median value of owner-occupied homes in the U.S. is $217,600.

$12,600

The median value of owner-occupied homes increased from $205,000 in 2016 to $217,600 in 2017. That’s an increase of $12,600 – roughly 6% – in one year.

50%

Roughly 50% of renter households in the U.S. spend more than 30% of their income for housing.

Perceptions of Housing Affordability


Percent of Americans that think each of the following proposals would be very effective or somewhat effective to improve the lack of affordable housing.

A pie chart showing 55 percent

55%

Lower the development and construction fees builders must pay so that more affordable units can be built

A pie chart showing 53 percent

53%

Increase government subsidies to builders to produce affordable units

A pie chart showing 51 percent

51%

Increase government subsidies to households to pay for housing

Percent of Americans that think each of the following proposals would be very effective or somewhat effective to improve the lack of affordable housing.

A pie chart showing 55 percent

55%

Lower the development and construction fees builders must pay so that more affordable units can be built

A pie chart showing 53 percent

53%

Increase government subsidies to builders to produce affordable units

A pie chart showing 51 percent

51%

Increase government subsidies to households to pay for housing

3 in 4

Americans think a lack of affordable housing is a problem in the U.S.

3 in 4

Americans think they would have trouble finding a home they could affordable in their city or county (58%).

Almost 3 in 5

adults (57%) say they would support proposals to build housing in their neighborhood that is more affordable than average for their neighborhood.

Percent of Americans who say the following would contribute, either a great deal or a little bit, to their trouble finding an affordable home.*

A pie chart showing 81 percent

81%

Home prices have risen too much and priced me out of the market

A pie chart showing 80 percent

80%

There are no (or very few) homes on the market I can afford

A pie chart showing 79 percent

79%

Individual personal reasons (such as lack of down payment, too much debt, loss of income)

A pie chart showing 70 percent

70%

There is too much demand competing for the homes I can afford

A pie chart showing 68 percent

68%

Mortgage interest rates have risen too much and priced me out of the market

*Only shown to those who said they think they would have trouble finding an affordable home in their city or county.

Percent of Americans who say the following would contribute, either a great deal or a little bit, to their trouble finding an affordable home.*

A pie chart showing 81 percent

81%

Home prices have risen too much and priced me out of the market

A pie chart showing 80 percent

80%

There are no (or very few) homes on the market I can afford

A pie chart showing 79 percent

79%

Individual personal reasons (such as lack of down payment, too much debt, loss of income)

A pie chart showing 70 percent

70%

There is too much demand competing for the homes I can afford

A pie chart showing 68 percent

68%

Mortgage interest rates have risen too much and priced me out of the market

*Only shown to those who said they think they would have trouble finding an affordable home in their city or county.

Back to top