With the urban migration and rising costs, learn why millennials should buy a home and how Clayton can help with affordable homes!
Most Americans have some notion that affordable housing isn’t readily available in the U.S. The reality is that over the past two decades, the availability of affordable housing, specifically rental properties for renters, has steadily decreased, and the crisis continues to grow.
There is not a single county in the U.S. that has enough affordable housing for people who are classified as extremely low-income renters.1 Extremely low-income refers to families whose income does not exceed either the minimum federal poverty level or 30% of the median family income in the area.2
The median family income does vary by county, but to give you an idea of what that means, according to the US Census Bureau, the national median family income in 2014 was around $54,000, making the extremely low-income limit around $16,200.
This affordable housing shortage creates a housing crisis as more and more Americans migrate to urban areas. The demand for urban living continues to rise, which increases the price of the currently limited supply of housing. By default as prices rise, the supply of affordable options falls.
In general, urban living usually means renting an apartment or buying a condo, but this is out of reach for many people—especially millennials.
Even though millennials “have a strong preference for city living and a high propensity to rent,” they still frequently choose to rent in areas further away from city centers because of the cost of living.3
Around half of the world’s population currently lives in urban areas, and it’s predicted that 2/3 of the global population will live in urban areas by 2050.4 A rapid increase in urban living threatens to result in high resource demand, and dense populations not only put a strain on resources but they can add to greater air pollution, uncollected waste issues and resulting health hazards if urban planners do not prepare to deal with these things.4
Something else to consider is the continual increase in rent costs and what it means for the rise in homelessness. The growing demand for urban living continues to drive up costs while current residents get pushed out because they cannot afford to pay. According to the Journal of Urban Affairs, increases by 15 percent with every $100 rise in rent costs.5
According to Urban Land, a rent standard of affordability of 30% of income was used to determine that more than half of current renters are “cost burdened,” which means more than 30% of their monthly income goes to rent.5 Urban Land explains that the median price for a new apartment today exceeds $1,300 in monthly rent, which is unaffordable by the 30% standard for about half of households who currently rent.
Culturally, many of us still want our space, our tree-lined streets and our beautiful communities. But how will we ever get there? For instance, many millennials would rather push off buying a home and cope with rising rent costs, but this means the ability to purchase a home in the future drops.
Rent costs continue to rise and the availability of affordable rent options continues to drop, so money that could go toward a home purchase continues to get invested in apartments that millennials can never actually call their own. Plus, nearly half of home buyers cite student loans as their largest barrier to buying a home.
On top of all the other barriers to buying a new home, there’s a national shortage of housing options, even for home buyers. Not only was there one of the slowest housing stock growths ever during 2011-2013,6 but there’s also a lack of affordable new homes.
In a survey by the National Association of Home Builders, 59% of respondents said they could not spend any more than $249,000 on a new home, but only 35% of new homes in 2015 were at or below that price point.6
However, there are affordable options for millennials that can help them save money instead of pouring money into rent for an apartment or home that will never be their own. Millennials can indeed achieve their homeownership goals and reach the American Dream of owning a home.
Clayton offers many different prefabricated home options for Americans chasing the American Dream of homeownership. Instead of succumbing to rising rent costs without ever owning your own home, you can find an affordable slice of the world to call your own.
It’s not just about homeownership either. It’s about having a home that was built efficiently in an ISO 14001 registered building facility where environmental management systems are in place to help preserve our world’s energy resources. It’s about having energy efficient features in your new home that help save you money and energy every month. It’s about the opportunity to have an expected monthly cost that won’t flux with the demand for the room you rent.
Prefabricated homes don’t have to be placed in rural areas either. For example, in 2004, the State of Washington passed a state bill requiring that local governments regulate prefabricated housing in the same manner as any other housing in terms of land use and zoning although local governments can require specific requirements be met for re homes regarding design and installation.7
In other areas of the country like Birmingham, Louisville, Milwaukee and Washington D.C., Manufactured Housing Institute (MHI) worked with local organizations and governments to design and build modular houses consistent in style with the urban neighborhoods. Being a part of a walkable, family friendly community near your friends and job is absolutely feasible with a prefabricated home.
As our world rapidly urbanizes and people migrate to urban areas, a Clayton Built® home remains an affordable way to secure your very own home.
Instead of choosing to rent and finding yourself stuck in an urban apartment that will never be your own, you can find a beautiful, affordable home that you’re proud to call your own.
Begin the home buying journey by following these easy steps.