The “Market” Is Not Real: Why the U.S. Needs to Change Its Approach to Rent and Home Prices
The U.S. housing market is facing a significant affordability crisis, with rising costs outpacing income growth and leaving many Americans, particularly millennials, struggling to achieve homeownership. This situation has led to growing concerns about the sustainability and fairness of the current housing market structure.
Housing costs in the United States have been steadily increasing, with California serving as a prime example of the extreme affordability challenges faced by potential homebuyers. In California, the median price of an existing single-family home reached a peak of $900,170 in May 2022, a dramatic increase from $626,170 in June 2020. This trend is not unique to California but reflects a broader national issue.
The affordability crisis is particularly acute for millennials, who are often caught in a perfect storm of financial challenges. Many are burdened with student loan debt, face stagnant wages, and are entering the housing market at a time of historically high prices. In California, for instance, the median household income is less than half of what’s needed to afford the monthly payments on a median-priced home.
The disparity between housing costs and income is stark when comparing California to the national average…
