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.

Congress needs to move legislation to establish a new secondary market system for conventional mortgages with a limited, well-defined federal government backstop for catastrophic circumstances.

Almost 10 years after the Great Recession pushed the economy to the brink of disaster, the nation's housing market remains far below its potential. The unsettled housing finance system contributes greatly to the problem. Uncertainty in the system stymies investment, slows the housing market and puts the broader economy at risk.

The key to an effective secondary market system for conventional mortgages is a limited federal backstop for catastrophic circumstances. History shows the limitations of the private mortgage market. During bad times, private mortgage credit has fled the market, leaving government-supported mortgage loans as the only option for qualified buyers.

Federal support is particularly important in continuing the availability of the affordable 30-year, fixed-rate mortgage that has helped millions of American families to build wealth and financial security through homeownership.

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.

Laws and Regulations Have Profound Effects on Production and Affordability Create report

Housing availability and policy in America

The ability to find a home in your area is a factor many of us take for granted. Not all have this luxury, and there are specific ways Americans would like to see the government act to remedy this.

Percent of Americans saying there is a housing shortage in their community:

  • 23%
  • 12%
  • 50%
  • 15%

Yes

Maybe

No

Don't know

35% total

Americans Agree on Housing Policies To Help The Middle Class

Percent of Americans who agree with each of the following policies:

A pie chart showing 26 percent

26%

Reduce regulatory hurdles to new housing production

A pie chart showing 36 percent

36%

Provide government support of the 30-year fixed-rate mortgage

A pie chart showing 49 percent

49%

Offer meaningful tax incentives that promote homeownership

A pie chart showing 23 percent

23%

Reduce trade barriers to make building materials less expensive

A pie chart showing 22 percent

22%

Limit federal involvement in local land use decisions

A pie chart showing 4 percent

4%

The government should not take any actions to encourage home ownership

48%

of Americans say it matters some or matters a lot what a candidate's positions are on housing policies that affect housing prices and availability

Homeownership in America

Homeownership is a key piece of the American Dream, and one that millions of Americans participate in each year. But for some, there are obstacles in the way to reaping the wonderful benefits associated with homeownership.

Intent to Purchase Housing

16%

of Americans plan to purchase a home in the next year

Obstacles to Purchasing a Home

Percent of Americans that say each of the following is an obstacle to purchasing a new home:

Finding a better job

  • 22%

Getting approved for a mortgage loan

  • 24%

Having enough savings to cover the down payment

  • 31%

Finding a home with the features and size that you want

  • 21%

Finding a home at a price you can afford

  • 34%

Being able to sell your current home at the ‘right’ price

  • 14%

Finding more information about the process of purchasing a home

  • 9%

Having to pay down student / other debt first

  • 15%

Homeownership presents great benefits

Percent of Americans saying each of the following are benefits of homeownership:

A pie chart showing 28 percent

28%

Sense of belonging to the community

A pie chart showing 27 percent

27%

Opportunity to build wealth

A pie chart showing 51 percent

51%

Secure place to raise a family

A pie chart showing 51 percent

51%

Good investment

A pie chart showing 69 percent

69%

It's a place to call my own

A pie chart showing 31 percent

31%

It's a part of the American dream

Remodeling in America

Millions of Americans remodel their homes each year, for many different reasons. This brief exploration of those remodeling their homes gives insight into the scale, and the reasons, for trying to improve our homes.

39%

of Americans say they definitely will, or maybe will, undertake a major remodeling project on their home over the next three years

Among those planning to remodel, Americans plan to remodel for the following reasons:

To update for modern amenities and design trends

  • 52%

To increase resale value

  • 41%

To increase rooms and square footage

  • 29%

Because I don’t want to leave my neighborhood

  • 17%

To accommodate a parent or other relative

  • 15%

Because it costs less than moving to a different home

  • 29%

Source: National poll conducted in Q4 2017 for NAHB by Morning Consult

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

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