Housing has been one of the weakest parts of the economy under tight monetary policy, contracting in seven of eight quarters from mid-2021 through early 2023 and resuming its drag in four of the past five quarters after a brief rebound. Home sales remain sluggish, down over 23% from six years ago and slightly lower than a year ago, while permits have fallen nearly 20% from their 2021 peak and starts have flattened, though both remain above 2019 levels.
The main issue is affordability: in 2023, more than a quarter of renters spent over half their income on rent and another 23% spent 30–50%, with rising utilities, insurance, and property taxes worsening cost burdens. Energy services rose 5.3% and water, sewer, and trash climbed 7.2% over the past year, while electricity rates are expected to rise further, in part to fund AI infrastructure. Although the Trump/Vance ticket highlighted the affordability crisis a year ago when the Affordability Index was at nearly half its pandemic peak, the index has only improved modestly since, rising 3%.
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