WASHINGTON— More consumers today say affordable housing is difficult to find, a new study from Fannie Mae reveals.
The Fannie Mae National Housing Survey special topic analysis surveyed homeowners and renters for their perspective on increasing housing density and zoning in their actual neighborhoods, including the expected impact on local home prices, rents, and taxes, and the types of housing supply they’re most likely to support. The survey also compared homeowners’ and renters’ perspectives on whether housing density should increase — and in what ways.
Among the findings:
- Far more consumers today say affordable housing is difficult to find than when Fannie Mae first asked the question in 2017, owing to significant increases in home prices and mortgage interest rates
- Significantly more renters than homeowners support building affordable housing in their own neighborhoods. And renters are much more likely than owners to support building denser housing types, such as townhomes, apartments, or condos
- More than half of consumers believe home prices, rent prices, and local taxes will increase if more homes are built in their neighborhood. “Which we found particularly interesting because it opposes the traditional economic argument that increasing supply lowers prices,” Fannie Mae said
Despite Agreeing on Unaffordability, Renters and Homeowners Often Strongly Disagree on Potential Solutions
“As expected, consumers are much more likely to say affordable housing is difficult to find today (69%) than they were in our 2017 survey (49%) — but the 2024 share is essentially unchanged since late 2021. Since the pandemic, consumers have dealt with several years of elevated home prices and sharply rising mortgage rates, which have led to an extraordinarily challenging home purchase market,” Fannie Mae said.
When asked to consider the possible solution of building more housing in their neighborhood to ease affordability challenges, there is a clear difference in sentiment between homeowners and renters, the data show.
“While our survey found that most consumers (82%) are in favor of building some type of new housing in their neighborhood, when we asked them specifically about building more "affordable" housing, renters were significantly more likely to be in favor than homeowners (73% vs. 44%),” Fannie Mae said. “Furthermore, while homeowners and renters are both likely to support building additional single-family detached homes in their neighborhood, renters are much more likely to support building other housing types, such as townhomes, apartments, or condos.
And when asked if they would support changes to local zoning codes or regulations to allow more housing development, nearly two-thirds of renters (63%) say they are in favor, while just 37% of homeowners say the same.
Consumers Aren't Convinced New Supply Will Improve Housing Affordability
“While most economists agree that building more homes will help slow price appreciation for buying and renting, consumers are less convinced. In fact, 59% say they believe home prices will increase in their neighborhood if more homes are built, while just 13% say home prices will decrease. One possible explanation for this discrepancy may be that many assume the homes being built would not be what they consider affordable,” Fannie Mae said.
Moreover, a slight majority of consumers (59%) think rent prices will increase if more homes are built, and 61% say local taxes will increase — showing additional perceived financial drawbacks of new construction.
Consumer Demand for Housing Types Doesn't Match What's Available
When looking at the types of homes that consumers say they would likely buy if they were in the market (given what is available and what they can afford), roughly one-third of consumers (31%) say they would buy something other than a single-family detached home, the study shows.
“However, we know that non-single-family detached homes represent only 18% of the housing stock mix. Clearly, consumer demand for this particular housing type appears to far outstrip supply, which we think could have important implications for homebuilders,” Fannie Mae said.