About Affordable Housing

Affordable houses are houses that are considered affordable to those with a median household income or below as rated by the national government or a local government by a recognized housing affordability index. The Median Multiple indicators, recommended by the World Bank and the United Nations, rates affordability of housing by dividing the median house price by gross [before tax] annual median household income.

Income is the primary factor – not price and availability, that determines housing affordability. In a market economy, the distribution of income is the key determinant of the quantity and quality of housing obtained. Housing affordability can be measured by the changing relationships between house prices and rents, and between house prices and income.

As of 2016, nearly 44 million Americans were burdened by the cost of housing, a figure which has been on the rise since 2003. A 2018 survey found that more than a third of those renting a home did not own a home because they couldn’t afford one.

American Millennials spend nearly half of their income on rent on average. When Baby Boomers were between the ages of 22 and 30 years, they only spent about 36 percent of their income on rent. One of the ways to fix this crisis is to provide more affordable housing.

If you are a close watcher of the real estate industry, you will agree that the demand for affordable housing will get a boost from economic recovery over the next five years. Despite the fact that the weak housing market has hit industry businesses hard, the reinforcement of housing and rising number of existing home sales will contribute to growth.

Mortgage lending rates will continue to remain tight and hamper revenue; however, the industry is poised for a recovery. Experts projected that the real estate industry recovery will be driven by improvements in employment and per capita disposable income.

The Bureau of Labor Statistics (united states of America) projects 11.1 percent job growth for real estate industry between 2012 and 2022, which is about as fast as average. During that time, an additional 38,000 jobs will open in the industry, hence any affordable housing construction company that is well equipped and positioned will sure rake in huge revenue from this industry within this period.

Some of the factors that encourage entrepreneurs to start their own affordable housing company is that the business is highly profitable, and an aspiring entrepreneur can successfully launch the business if they have a pool of cash. Lastly, if you are going into the construction of affordable housing, it is very important to be able to use your ideas to meet the rapidly changing needs of society when it comes to housing.