In this second part of our series on the Spring 2024 Outlook Webinar, we delve into the economic insights shared by experts from the Kem C. Gardner Policy Institute, Salt Lake County and the Utah State Legislature. Understanding these economic factors is crucial for addressing housing affordability issues effectively.
Internal vs. External Population Growth
The webinar highlighted a shift from internal population growth (births minus deaths) to external growth (net migration). This shift has put immense pressure on the housing market.
Impact on Housing Affordability:
Solution:
Inflation and Interest Rates
Inflation and high interest rates were discussed as significant headwinds impacting housing affordability. High interest rates increase the cost of mortgages, making homeownership more expensive.
Impact on Housing Affordability:
Solution:
Earnings vs. Housing Costs
The webinar presented data showing that housing costs have significantly outpaced earnings, making it challenging for many to afford homes.
Impact on Housing Affordability:
Solution:
Rental Market Dynamics
There was a significant discussion about the rental market, where rents have increased substantially, making it harder for renters to save for homeownership.
Impact on Housing Affordability:
Solution:
The Role of Demographics in Housing Demand
The growing number of millennials and the upcoming wave of Gen Z entering the housing market were highlighted as factors increasing housing demand.
Impact on Housing Affordability:
Solution:
Economic factors play a critical role in housing affordability. By understanding and addressing these factors, we can develop more effective strategies to ensure that everyone has access to affordable housing. In the next part of this series, we will explore the legislative and policy initiatives that can support these efforts.
Stay tuned for Part 3, where we will delve into the role of government and legislation in promoting housing affordability.