Housing affordability has been a hot topic marked by soaring prices since 2019.
In a recent survey conducted by YouGov, nearly 3 in 4 Americans felt housing affordability had worsened in their communities. Nearly half of the 1,400 respondents (46.7%) reported being moderately or extremely concerned about their own ability to afford housing.
Florida State University’s Sam Staley is the director of the DeVoe Moore Center within the College of Social Sciences and Public Policy. He recently collaborated with the Florida Policy Project to develop the Florida Housing Data Project (FHDP), a tool that allows Florida residents and policymakers to see local-level housing trends, track shortages in single-family and rental units and understand whether local markets have been in balance, surplus or deficit over time.
Staley says that housing affordability has been a chronic problem for decades in several large markets, but the pandemic turned it into a national concern.
“Housing prices were increasing before the pandemic, but the public health crisis and consequent lockdowns created a historically unique set of circumstances that spiked housing prices from pressures on the demand and supply of the market,” Staley said.
According to Staley, addressing housing affordability depends largely on balancing supply with demand.
“Ultimately, the only solution to combating falling housing affordability is to bring supply and demand back into balance,” he added. “Capping demand is neither feasible nor desirable. The key is to loosen up supply. In short, we need to build a lot more housing.”
Media interested in gaining insight on the current issue of housing affordability may contact Sam Staley at sstaley@fsu.edu.
Sam Staley, director, DeVoe Moore Center
What key factors have contributed to the issue of housing affordability in the United States?
From a national perspective, which mirrors rising affordability concerns in Florida, three factors are driving the current wave of eroding housing affordability:
First, COVID-19 goosed home buying in complex and unanticipated ways. Many people moved out of high density, high-cost areas, such as New York, and moved to lower density, higher quality of life locations, such as Florida. Limited in their mobility and ability to spend on other high-end capital goods, such as cars, many of these households shifted their purchases to new homes, using their current housing or savings as collateral.
Second, the pandemic significantly disrupted supply chains. New housing and housing renovations tap into a dizzying array of goods and services from within and outside the U.S. Obtaining materials for piping and wood, for example, became more problematic because many finished products and raw materials were imported. Materials would literally be sitting in cargo ships outside of ports because they could not be offloaded because of restrictions on personnel and the availability of labor. Combined with a shortage of skilled labor on construction sites, the cost of construction increased.
Third, local building regulations and decades of land-use planning have created an administratively cumbersome and highly political process for securing rights to build and securing permits for new construction. With limited new construction and greater costs for navigating the regulatory process, fewer housing units were brought online just as demand surged. In addition, local building regulations are notoriously out of date, limiting the ability of builders to use new technologies such as off-site construction to build more cheaply.
What outlook does the 2026 housing year have? Are there any important areas that could see improvement?
The good news is that some of the disruptions brought about by the pandemic are easing. Supply chains have become more orderly, and some of the households that moved outside of high cost, high density states have moved back. Some markets, such as California’s coastal regions, Seattle and Portland continue to experience debilitatingly high housing costs.
The housing price index for Florida seems to have peaked in December 2024, according to the U.S. Federal Housing Finance Agency, and plateaued. But housing prices are still 70% higher on average than before the pandemic.
On the national level, housing prices did not increase as dramatically, just 56% over the same period, but housing prices didn’t start to plateau until 2025.
While housing prices have moderated, very little data suggests that housing prices will decline. In short, most of America, including Florida, will be stuck with much higher housing prices for quite a while.
Paradoxically, the slowdown in the economy is helping to moderate housing price increases as demand stagnates. At the same time, wages are not increasing quickly. Robust increases in productivity over the past year have not yet translated into meaningfully higher wages, so most households are feeling the financial pinch of higher housing prices.