Millennials still at home? Blame long housing shortage
For millennials who can’t afford to move out from home or live without roommates, Freddie Mac has pinpointed the blame: a decade of inadequate housing construction.
Home building has yet to recover from the Great Recession, according to federal data. Despite a growing population, the United States added far fewer units annually from 2008 to 2016 than in any year in the preceding four decades.
The result is a housing shortage leaving many millennials stuck in shared living arrangements instead of forming their own households.
The mortgage-finance company concluded that the United States is 1 million to 4 million housing units short of demand, and that young adults living with parents or roommates are a symptom of that demand.
“If supply continues to fall short of demand, home prices and rents are likely to outpace income,” Freddie Mac wrote in its most recent report.
Freddie Mac listed increases in development costs, a shortage of skilled labor and local opposition to high-density living as reasons for housing construction lagging behind demand.
But while Houston has contended with rising construction and labor costs like the of the nation, at least one cost has remained affordable.
The National Association of Home Builders estimates that costs related to regulations — such as local zoning restrictions on lot sizes and building height — increased an average 29 percent throughout the country between 2011 and 2016.
Most areas in Houston lack such restrictions, allowing the cost per unit built on such land to remain less expensive.