AILSA CHANG, HOST:
Right now, housing is not affordable for a record number of Americans - yet again. And this year's numbers break a record set last year. They show that both renters and homeowners are struggling. NPR's Jennifer Ludden is here to tell us more. Hi, Jennifer.
JENNIFER LUDDEN, BYLINE: Hi, there.
CHANG: OK, so this news is probably not surprising to most people because, you know, we just had an election where the high cost of living, including for housing, was a top issue. So just how bad is this unaffordability?
LUDDEN: Well, there are 43 million households that pay more than 30% of their gross income for housing. Now, this is from an analysis by Harvard's Joint Center for Housing Studies. It's based on new census data from last year. And we're talking half of all renters and just under a quarter of all homeowners are struggling. And it gets worse from there.
CHANG: Wait. Really? How so?
LUDDEN: It gets bad. So nearly half of those households - more than 21 million - they're severely burdened because they pay more than 50% of their income for housing.
CHANG: Wow.
LUDDEN: Harvard research analyst Peyton Whitney says the biggest bump in unaffordability was among homeowners who are just dealing with a triple whammy.
PEYTON WHITNEY: They are experiencing elevated interest rates, right? They're also facing extremely high housing costs to enter homeownership. And we've also seen insurance costs and other costs associated with homeownership increasing over the last year and since the start of the pandemic.
LUDDEN: And since 2019, she says housing costs for both owners and renters have gone up more than wages.
CHANG: I believe that. We just heard her mention insurance costs. What's going on there?
LUDDEN: Yeah, that is an increasingly big deal. More extreme weather disasters are sending homeowner insurance rates just spiking. Harvard finds these rates - and also property taxes - are up 28% in recent years. That's even more than housing rose. And it means, you know, older homeowners who may even have paid off their mortgage now can face this rising - this new rising cost, and it can be really hard to keep up if you're on a fixed income.
CHANG: Yeah. Well, I know that President-elect Trump has talked about wanting to bring down the cost of housing, and we've been reporting on places all around the country trying to find ways to do that. So let me ask you - and this may be wishful thinking, but is there any kind of a timeline for when rent or mortgages won't be out of reach for so many people?
LUDDEN: Yeah. It feels like it should just go back to normal, right?
CHANG: Yeah.
LUDDEN: So the timeline would be long. I spoke with Jenny Schuetz - she's vice president of housing at the philanthropy Arnold Ventures - and she worries people may have unrealistic expectations. She's like, you know, the price of eggs, gas and milk - they fluctuate, and they can go down quite a bit, but housing doesn't work like that.
JENNY SCHUETZ: The way to get falling housing prices is to have a massive global recession, and the downside of that is just enormous.
LUDDEN: She says best case - you know, for the overall market, we're speaking - you want to go back to housing prices only going up along with overall inflation. And the way to get there is to just build and build and build ourselves out of a massive housing shortage that is pushing up prices. But she has another reality check, and that's that, as places build more, the new housing - even if it's, like, a smaller apartment, say - it's going to be more expensive than an older single-family home. And that's because new costs more, and you cannot just - poof - magically create older, cheaper housing.
CHANG: I mean, that makes sense, but that is totally depressing.
LUDDEN: It's super depressing, but - and there are lots of other reasons why this is a long-term challenge, to be clear. But I can end on a positive note here. I mean, there are places we have seen recently - local construction booms can bring down rents. Austin, Texas, is one example. And Schuetz says, look, it's great that so many people are just finally talking about this problem. It has been growing for years - really decades, in some ways - and now there is a bipartisan push to do something.
CHANG: That is NPR's Jennifer Ludden. Thank you so much, Jennifer.
LUDDEN: Thank you.
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