DANIEL ESTRIN, HOST:
We're about to close the books on one of the slowest housing markets in 30 years. It's another symptom of one of the most frustrating issues for many Americans. Here to talk us through the year in housing and what next year might bring is NPR business correspondent Laurel Wamsley. Hi, Laurel.
LAUREL WAMSLEY, BYLINE: Hey, Daniel.
ESTRIN: So I'm speaking to you from Tel Aviv, but it seems like housing comes up in a lot of the conversations I have with friends and family. Back in the U.S., I do hear a lot of frustration, so is everyone dissatisfied with the housing market right now?
WAMSLEY: I think you're right. The country's housing shortage has really emerged as one of our thorniest problems in this country, and it's affecting people at many income levels. I mean, for the very rich, they are doing just fine and probably making money on their real estate investments. But for most of the rest of us, the cost of housing is shaping our lives in one way or another.
I mean, just to start with the folks who are feeling this most acutely, the government just released figures from its annual homelessness count, which takes place each January. And they found that this year, homelessness increased 18% from last year. So the number of people experiencing homelessness on one night in the U.S. was about 23 out of every 10,000 people, the highest they've ever recorded. And sadly, the biggest increase in homelessness was in families with children, where there was a nearly 40% jump. One of the factors behind that is just a lack of affordable housing.
ESTRIN: And even for people who are not homeless, housing has become a big issue.
WAMSLEY: That's right. For both renters and homeowners, there are real housing problems. More than a quarter of renters are paying more than half of their income on rent and utilities. That's a big chunk of your pay just going to a roof over your head.
ESTRIN: And what about people who want to buy a home?
WAMSLEY: Well, it's really tough. The median sales price of an existing home has risen 50% in the last five years. That really just blows up the math on homebuying for a lot of people. Earlier this year, I spoke to Ellen Lamont, who's in her late 30s and lives in Denver. She and her partner had just had their offer accepted to buy a house finally after making 20 or 30 offers.
ELLEN LAMONT: It has been really hard. I make a decent salary. You know, I work for the government as a scientist. If you were anywhere else in the country, I feel like my salary would be competitive, and I'd be able to afford a home, you know? And I'm a two-income household. It should be even easier, and it turns out that that is not the case.
WAMSLEY: And, of course, mortgage rates have stayed pretty high. This week, they were not too far below 7%.
ESTRIN: Does that complicate things for both buyers and sellers?
WAMSLEY: Definitely. For people like Lamont, it makes it expensive to buy, and for homeowners, it makes it less attractive to sell. Many homeowners have 3% rates that they don't want to give up. Rising home prices means that many homeowners are sitting on a good amount of equity, but many feel stuck in place. To move to a slightly larger home, say, to accommodate a growing family, might mean doubling their mortgage payment. And, you know, the U.S. has traditionally been a society where people move to follow job opportunities. But with this lock-in effect, as it's called, people are less likely to move because the home that they can afford is the one that they already have.
ESTRIN: What effect has this had for the housing market?
WAMSLEY: Well, because so many people aren't selling, we're on track for 2024 to have the fewest existing home sales since 1995. That's almost 30 years ago, when the country's population was more than 20% smaller than it is now.
ESTRIN: Are there any signs that any of this could change going into the next year?
WAMSLEY: Yeah, you know, there are some signs of things loosening. More inventory has been coming on the market and home sales were up last month. It might be a sign that people are getting used to these higher rates. You know, just as time marches on, many people decide that they do have to move. And broadly, many cities and states are working on ways to build more housing, for instance, by allowing more density or requiring fewer parking spots for every housing unit. Cities, including Raleigh and Austin, have built a bunch of new apartments, and they've seen their rent prices decline. That's certainly good news for renters.
ESTRIN: That's Laurel Wamsley, who covers pocketbook issues for NPR. Thanks so much, Laurel. Happy New Year.
WAMSLEY: You're welcome. You, too. Transcript provided by NPR, Copyright NPR.
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