Those who have been following Housing 2.0 seminars and workshops know that we have been urgently focused on the epic housing affordability crisis confronting our nation. Thus, we decided to devote the 2026 Housing 2.0 seminars to this topic.
In this blog, I want to clarify that the crisis is worse than you thought when accounting for all costs of homeownership. I’ll use one high-cost market as an example, Long Island, N.Y. The table below includes a comprehensive list of expenses for a median-priced homed owned by a median-income household.
The results suggest a completely unsustainable housing price structure on Long Island. That’s because approximately 80 percent of post-tax income (e.g., resources actually available to the household) is consumed paying for all the costs of homeownership. This includes mortgage, insurance premium, utility expenses property taxes, utility expenses, cable/internet services, and the annual commute to New York City.
A significant opportunity cost omitted is the income lost not being able to invest the nearly $170,000 downpayment (e.g., stocks, bonds, high-interest savings accounts). This cost burden may be manageable for existing homeowners who bought long enough ago to benefit from the much lower housing costs and mortgage interest rates than currently available.
However, eventually properties must be sold to new buyers who don’t have the benefit of prior real estate ownership or parents who can contribute funds to their purchases. It takes the lowest cost housing markets like Pittsburgh for the cost of housing to be affordable for a medium household income buyer. But there are not enough of those markets with approximately 50 percent of the 100 largest markets severely financially burdened with price-to-income ratios greater than 5.0 (see figure below). Thus, we are seeing substantial demographic shifts to lower housing cost markets.
In my last blog, I reported that affordability was a crisis in three parts: shrinking workforce, glacial productivity, and profound disconnect between price and income. In this blog I would like to address affordability based on who has control of the solutions required to mitigate this crisis:
The stuff builders can control provides the basis for Housing 2.0 workshops and training I provide to the industry under the name “The 7 Habits of Highly Effective Builders.” This is based on best practices derived from extensive research and industry experience that can be applied for $10,000s of cost savings and added value for each home constructed. Note this outcome is supported with diverse empirical results including social housing, affordable housing, larger developer, large builder and factory-built home case studies.
The key to success entails a diligent application of practices that add cost without adding value to practices that minimize cost while maximizing value. This includes seven habits focused on shifting from:
The stuff government can control builds on this theme with 5 habits of highly effective governmental leaders that could substantially reduce the cost of housing. The best practices include:
And lastly, affordability will depend on homebuyers making better choices optimizing their home purchase decisions. Again, following through with the theme, I’ll suggest there are 5 habits of highly effective homebuyers. These include:
I look forward to presenting details of this affordability framework at our next Housing 2.0 seminar scheduled for June 24 from noon to 1:00 pm EST. In this seminar we’ll take a deeper look at each of the forces driving the housing affordability crisis with an eye for how all of us can take effective action. And we have to act. Americans are house poor with nearly two-thirds of households without any savings on a monthly basis, and nearly 30 percent of the households with jobs unable to cover basic needs.
The economic ripple effects include lack of disposable income to spend on other goods and services and incredibly higher government costs to provide a wide array of health and housing-related services for an increasing unhoused population.
Please join me in not accepting this tragic reality but in understanding the critical steps to changing it and taking action.