Everyone wants to provide a good home for his or her family where they will make memories for the longest time. If you ask any homeowner in the metropolises, owning a home is not the easiest thing to do. Due to the rising population, there has been a growing need for affordable housing. Unfortunately, affordable housing has been a challenge, with most people spending a huge chunk of their income on housing. The significant challenges that potential homeowners are having when it comes to getting affordable housing are:
How is the market a problem for prospective homeowners? There is something that has been witnessed in several cities. There is a mindboggling increase in individual and institutional investors who are going ahead to purchase distressed properties in massive amounts. The problem is that homeowner is usually locked out, mainly because they do not have as much muscle as these other big investors.
The problem is that the investors go ahead and convert these home into single-family units which are even more expensive denying the middle-income homeowners the opportunity to purchase these homes. That is not all. Lenders are increasingly becoming wary of giving out mortgages, which is further making it difficult for people to buy homes.
A shift in demographics and the market
As aforementioned, it is becoming difficult for low to middle income (LMI) households to get a property as more investors continue to change homes into single-family houses which have proven to be expensive. There are only a few LMI households left for the big population to share. There is merely enough. Why? Note that young people continue to move out of their parents’ homes. At the same time, there hasn’t been enough time to develop new homes to accommodate the growing population.
Housing development costs in the metropolises are higher than in other areas. There are changes in lifestyle and business that have increased the cost of building materials, labor and so on. For instance, people in the metropolises will want to work from home, tighten their security and so on. You will find that they need VPN always on to be able to carry on with their day to day tasks. Internet service providers need to get paid. All these costs together with design adjustments and expenses incurred to obtain permits will eventually reflect in the selling price.
Lack of funding for development among other issues are the significant challenges facing affordable housing, especially in the metropolises. They are also challenging to overcome, and for that to happen, there is a need for going back to the drawing board. New housing finance structures should be created as one of the strategies for combating this problem.