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The Socioeconomics of the Housing Crisis

Lisa May, Director of Advocacy and Public Policy at Maryland REALTORS® was a featured panelist recently at the MACo Housing Symposium on October 19, 2022, where she spoke on the socioeconomics of the Housing Crisis and the different challenges various groups of Marylanders face finding housing that meets their needs.

Although lack of affordable housing was a pre-pandemic issue, affordability has become an even greater challenge. Low inventory, rising interest rates, inflation, and financial insecurities across all socioeconomic levels are causing home prices to climb higher and affordability levels to drop.

At the symposium, May presented data from NAR and others highlighting the current housing crisis. You can find it here: Amount of Housing Available in Maryland. It is a valuable resource. She shared the Statewide Housing Affordability 2022 Survey by Maryland REALTORS® which outlines groups most impacted by the housing shortage.

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Sufficient housing is not available for those people with low to moderate incomes, younger people just getting started in their careers, older people who are looking to downsize, or those who have special needs. There are not enough rental options or single-family homes available to purchase. And there are not enough new houses and apartments to accommodate select groups of low to moderate- income earners and younger demos.

Click the image below to view the entire presentation or click here.

According to Karen McJunkin, Regional Partner, and Vice President of Elm Street Development, Maryland’s costs of construction are above the national average, with the state’s land costs and permitting fees showing the highest amounts

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above the norm. In particular, permitting costs are twice as high in Maryland as they are in other states. The costs have consequences for homebuyers in our state. Lori Graf of the Maryland Building Industry Association noted, “for each $1,000 increase in the price of a home, 2,813 Maryland residents are priced out of a home.”

Maryland REALTORS® went on to illustrate the economic impact of inflation as a significant factor affecting housing affordability. According to Open Doors Maryland, the National Association of Realtors, and Freddie Mac, Maryland’s Housing Shortage is nearly 120,000 units and growing. This has become a true crisis not just for the few, but for the growing majority.

Housing supply affects everyone – those looking to buy, looking to sell, and looking to remain in their homes. We are in this together and together, we must promote additional housing supply as one of the solutions to ease the Housing Crisis.

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