Homeownership Part 12: 1.82 Million Missing Households: Gen Z, Millennials, and the Parents’ Basement Problem
There is a concept in housing research called a “missing household” — a household that, based on historical patterns of how Americans move through adulthood, should exist but doesn’t. It refers to an adult or group of adults who would, in a normally functioning housing market, have formed an independent household by now: renting an apartment, buying a starter home, setting up a life. Instead, they are living with parents, sharing space with multiple roommates out of financial necessity, or staying in arrangements they would have left years ago if the math had worked out differently. In 2025, the United States had 1.82 million of these missing households — the highest count in four years, and the clearest single statistic for understanding what the housing affordability crisis is doing to a generation. About 1.82 million Gen Z and Millennial households who, based on historical trends, should have formed independent households, were forced instead into what researchers are calling a state of suspended adulthood by a mix of low inventory and high borrowing costs. These are not people who have chosen to live at home or who prefer the arrangement. They are people the housing market has structurally excluded from the next chapter of their lives — and the consequences of that exclusion run far deeper than the inconvenience of a shared address. The numbers behind the disappearance The 2026 Housing Supply Gap Report from Realtor.com found that 1.82 million Millennial and Gen Z households were missing in 2025 — the highest count in four years. Among 18- to 44-year-olds, headship rates have declined over the past decade as high housing costs and limited supply have delayed independent living. The share of young adults living with parents was, on average, 2.7 percentage points higher by age than during the 2010 to 2014 period. That 2.7-point difference might look modest in isolation, but applied across the full population of young adults in America, it represents millions of people whose life trajectories have been altered — not by personal choices, but by a market that has priced them out of independence. About 1.5 million more adults under 35 live with their parents today than a decade ago — a 6.3% jump, more than double the rate of growth for the young adult population overall. This trend is not a post-pandemic blip. It has been building steadily for years, accelerating as home prices outpaced income growth, as mortgage rates rose and stayed elevated, and as the starter home — the traditional first rung on the property ladder — became an increasingly rare product in new construction pipelines squeezed by high material costs, labor shortages, and builder economics that favor more profitable, higher-priced units. Over 70% of Gen Z and Millennials said survival spending is their norm and that wealth is out of reach, according to a March 2026 survey by Beyond Finance. Only 32% said the American Dream is still attainable. A Wells Fargo study released in the same month found that 64% of parents with Gen Z children are still providing financial support, and 56% say doing so is straining their own finances — a sign the affordability crisis is rippling upward through families, not just hitting young adults alone. The burden of a generation priced out of independence is not contained to that generation. It is being distributed across households, across ages, and across family balance sheets in ways that compound the financial stress at every level. What is actually keeping them out The barriers facing young buyers are often described as a single problem — affordability — but they are in practice a stack of distinct and compounding obstacles, each of which would be significant on its own and which together create a nearly insurmountable barrier for buyers without meaningful financial support from family. The income threshold is where the math first fails for most young buyers. The minimum income needed to purchase a median-priced starter home in 2025 was approximately $86,000 — a figure that is far higher than what many workers in their twenties and early thirties actually earn. High rents make it hard to save for a down payment, and starter homes are often priced well above what early-career incomes can support. The entry-level market is very tight, and younger buyers are often competing with repeat buyers who already have equity — a structural disadvantage that cash offers and existing equity only widen. Student debt is the second layer. Gen Z and Millennials collectively carry a disproportionate share of the nation’s student loan burden — debt that affects debt-to-income ratios, constrains mortgage qualification, and reduces the disposable income available for saving. Student loan payments severely constrain mortgage qualification and down payment savings. Even with income-driven repayment plans, debt service limits housing budgets for millions of young buyers entering the market. The borrower who earns enough to qualify for a mortgage on paper may still fail the debt-to-income test because of a student loan balance accumulated before they ever earned a meaningful paycheck. Then there is rent. In most metropolitan areas, rental costs have risen so sharply — from April 2020, the typical U.S. apartment rent climbed by 28.7%, while median household income grew by only approximately 22.5% over the same period — that the act of simply paying rent each month has become an obstacle to the saving required to exit renting. The family paying $2,000 a month in rent is not building equity. They are subsidizing someone else’s mortgage while watching their own down payment timeline extend by years. The longer rent consumes a household’s income, the longer the path to ownership becomes — and for millions of young households, the path has become so long that many have stopped believing it leads anywhere reachable. The financial nihilism problem One of the more underreported consequences of sustained housing unaffordability among young adults is what researchers and financial analysts have begun calling financial nihilism — the behavioral shift that occurs when homeownership, and the broader promise of
Homeownership Part 11: What Executive Order 14394 Actually Does and Doesn’t Do for Buyers
When a president signs an executive order on housing, it generates a predictable news cycle. The announcement lands. Headlines describe sweeping action. Advocates on both sides issue statements. And then, fairly quickly, the coverage moves on leaving most ordinary Americans, including the aspiring homeowners who actually have a stake in what the order does, with a vague sense that something happened but little clarity on what it was or whether it matters to them. That is the situation with Executive Order 14394, signed by President Trump on March 13, 2026, and formally titled “Removing Regulatory Barriers to Affordable Home Construction.” The order has been celebrated by the homebuilding industry as a meaningful step toward supply side relief. It has been criticized by housing policy advocates as a document that targets the wrong problems, leaves the biggest ones untouched, and introduces new contradictions through policies in other parts of the administration. And it has been largely misunderstood by the general public, who deserve a clear explanation of what the order actually does, what it doesn’t do, and what its likely impact on the housing market and on aspiring buyers will realistically be. This is that explanation. What the order says it’s trying to do The order’s stated purpose is direct: the American dream of homeownership depends on a dynamic housing market in which a varied inventory of new homes is built and renovated each year. Layers of unnecessary regulatory barriers, slow permitting processes, and onerous mandates at all levels of government have delayed construction, restricted development, and driven up the costs of new housing. It is the policy of this administration to reduce those regulatory barriers and to steward taxpayer dollars in a manner that promotes housing affordability. That is a reasonable diagnosis, as far as it goes. Regulatory costs do add meaningfully to the price of new construction. Permitting delays do slow housing delivery. Inconsistent building codes do add friction and cost to development projects. These are real problems with real consequences for supply. The question the one that matters for buyers trying to understand whether this order changes anything for them is whether the specific mechanisms the order uses to address those problems are the right ones, whether they are powerful enough to move the needle, and whether other policies from the same administration are working against what the order is trying to accomplish. What the order actually directs The order directs federal agencies to reduce regulatory burdens on residential development, streamline environmental permitting, and encourage state and local governments to adopt housing friendly policies. It includes several key provisions that developers and homebuilders should be aware of. The first set of provisions targets federal environmental permitting. The order directs the Secretary of the Army and the Environmental Protection Agency to revise permitting standards including stormwater permits, wetlands permits under Section 404 of the Clean Water Act, and related construction site requirements with the goal of reducing housing construction costs and streamlining regulatory decision making. These are legitimate friction points in the development process, particularly for projects near water bodies or in areas with complex environmental conditions. Streamlining them could meaningfully reduce timelines for some projects. Critics, however, note that these are also protections that exist for reasons managing runoff, protecting wetlands, maintaining water quality and that weakening them carries environmental risks that do not appear in the order’s cost benefit calculus. The second major provision targets energy efficiency mandates. The order directs HUD and USDA to take appropriate action to reform and where appropriate eliminate unduly burdensome or costly energy efficiency, water use, or alternative energy requirements for housing, including manufactured housing. Reducing energy code requirements could lower construction costs in the short term. It would also, depending on how aggressively implemented, reduce the long term energy efficiency of new homes meaning buyers could pay less at closing and more in utility bills for the life of the home. That tradeoff is not mentioned in the order. The third provision and arguably the most practically significant for the housing market involves HUD’s role in pressuring state and local governments toward housing friendly land use policies. By May 12, 2026, the HUD Secretary must issue best practices for state and local governments addressing, among other things, streamlined permitting, by right development for single family homes, limits on green energy mandates, acceptance of manufactured and modular housing, and removal of urban growth boundaries and similar restrictions. These best practices may become conditions for federal housing grants. This last element tying federal housing grant dollars to local land use reform is the order’s most powerful lever. The federal government cannot directly override local zoning laws, which remain under local and state jurisdiction. But it can use the substantial funding it distributes through housing programs as a carrot and a stick: communities that adopt housing friendly policies gain access to federal dollars, and those that don’t face the prospect of losing them. This approach has precedent, and when implemented with meaningful enforcement, it can change local behavior in ways that no amount of federal guidance alone can accomplish. The order also directs the Treasury Department and HUD to evaluate ways to better align Opportunity Zone tax incentives with the goal of expanding housing supply using an existing tax incentive framework to channel more private capital into residential development in underinvested communities. The companion order on mortgage access EO 14394 was signed alongside a second housing related order EO 14393, titled “Promoting Access to Mortgage Credit.” EO 14393 establishes a federal policy to improve the availability and affordability of mortgage credit by reducing regulatory burdens, particularly for community and smaller banks, and directs federal agencies to consider reforms to mortgage lending, supervision, and housing finance systems. The two orders together represent a two track approach: one targeting the supply side of the housing equation, the other targeting the credit access side. The mortgage credit order is notable for its focus on community banks institutions with under 100 billion dollars in assets which
Homeownership Part 10: The 4 Million Home Deficit: How America Built a Housing Crisis
Every conversation about housing affordability eventually arrives at a number that is large enough to feel abstract but concrete enough to explain nearly everything else: 4 million. That is approximately how many homes the United States is short of meeting the housing needs of its population right now. Not 4 million luxury units. Not 4 million vacation properties. Four million homes that should exist, starter homes, rental units, townhouses, apartments, and simply don’t, because for more than a decade, the country has built far less housing than the number of households being formed. That shortfall is not a statistic sitting in a single report. It is the denominator of the entire affordability crisis. It is why home prices have surged 50% since 2020. It is why rental costs have climbed fast enough to make saving for a down payment nearly impossible for middle income earners. It is why first time buyers are competing in the same market against investors, move up buyers, and cash purchasers with existing equity to deploy, and consistently losing. Understanding the supply gap does not require a degree in economics. It requires understanding one simple principle: when there are significantly more buyers than available homes, prices go up, and they stay up until supply catches up. Supply has not caught up. It is falling further behind. A decade of underbuilding coming due The housing shortage in the United States continued to widen in 2025, with the national supply gap reaching an estimated 4.03 million homes according to Realtor.com’s 2026 Housing Supply Gap Report. In 2025, approximately 1.41 million new households were formed across the country while only 1.36 million housing starts were recorded, an annual shortfall of about 50,000 homes that, while modest on its own, compounds a cumulative deficit built over more than a decade of underbuilding. The South carries the largest regional deficit at approximately 1.62 million homes, followed by the Northeast at 952,000, the Midwest at 865,000, and the West at 660,000. Measured against total construction since 2012, the Northeast faces the most acute gap even after modest improvement in recent starts. These are not regions where housing was expected to be unaffordable. Several of these markets, particularly in the Midwest and South, were long considered the country’s affordable alternatives to expensive coastal cities. The shortage has found them too, and the people who moved there hoping to escape unaffordable markets have discovered that the problem followed them. Even when annual construction and household formation are roughly balanced, the market is still digging out from more than a decade of underbuilding, as Realtor.com’s chief economist Danielle Hale noted. The fact that it would take roughly seven years to eliminate the deficit even under an optimistic building scenario highlights just how significant and persistent this shortage has become. Seven years is not a near term fix. It is a generational timeline for a problem that is affecting buyers right now, today, who cannot wait seven years for the market to rebalance. Why builders aren’t building faster The instinctive response to a shortage is to build more, and builders have tried. Housing completions in 2025 remained historically elevated. Single family and multifamily starts have been running at levels not seen since before the Great Recession in some years. The problem is not that the industry has been idle. The problem is that the structural obstacles to construction are so numerous, so entrenched, and so resistant to quick resolution that even elevated building rates have not been enough to close a gap this large. Zoning is where the analysis typically begins, and for good reason. Single family zoning, which restricts large swaths of residential land in most American cities and suburbs to detached single family homes only, remains one of the most significant regulatory barriers to increasing housing density. Local zoning boards influenced by NIMBYism have historically blocked or delayed higher density development, from duplexes and accessory dwelling units to apartment buildings near transit corridors. The result is a landscape in which land is technically available for housing but legally restricted from being used for the types of housing that the market actually needs most, smaller, denser, and more affordable units. At the local level, there remain too many review cycles in permitting, and limited consistency from town to town with local inspectors. One developer reported he couldn’t get a certificate of occupancy for two months because the town requested he change the property’s address. In Colorado alone, there are over 300 different building codes. This fragmentation of regulatory authority is not a minor inconvenience. It adds time, cost, and uncertainty to every development project, and at the margins, it is enough to tip projects that might have proceeded into abandonment. Labor is another constraint that has worsened. The construction industry has faced workforce challenges since the Great Recession, when approximately one million workers left the sector and did not return. Immigrants make up about 30% of the construction labor force, and the ongoing immigration crackdown is expected to reduce that supply further going forward. High interest rates have compounded the problem, with loan rates for smaller builders rising sharply. Regulatory costs now add an estimated $94,000 per home, about one quarter of the total price, underscoring the need for deregulation to improve affordability. The cost of building materials has risen 41.6% since the COVID 19 pandemic, far outpacing overall inflation. Recent tariff actions alone are estimated to add an average of $10,900 to the cost of constructing a new single family home. As builders shift toward constructing higher priced homes to cover their expenses, the entry level housing that first time homebuyers rely on is disappearing from new construction pipelines. This last point is particularly important. Even when builders are building, the economics of construction push them toward larger, more expensive homes where margins are easier to achieve. The starter home, the traditional entry point into homeownership for first time buyers, has become increasingly rare in new construction, precisely because it is the hardest
Homeownership Part 9: You Can Buy a Home With a Section 8 Voucher. Most People Have No Idea.
There are roughly 2.3 million households in the United States receiving Housing Choice Vouchers, the federal rental assistance program most people know as Section 8. For the vast majority of those families, the voucher works the same way it always has: a local public housing authority determines how much rental assistance the family qualifies for, the subsidy goes to a landlord each month, and the family pays the difference. Month after month, year after year, the voucher pays rent. It builds nothing. It accumulates nothing. When the lease ends, the family moves, and the cycle starts again. What most of those 2.3 million households do not know, and what most housing professionals, policymakers, and advocates rarely discuss with adequate urgency, is that the voucher can do something fundamentally different. It can pay a mortgage instead of rent. It can help a family buy a home, build equity, and begin the process of wealth accumulation that homeownership makes possible. A program exists specifically to enable this transition, it has been authorized by federal law since 2000, and as of early 2024 it had facilitated just over 10,000 closings nationwide in more than two decades of existence. That number, 10,000 purchases from a pool of 2.3 million eligible voucher holders, captures in a single statistic the size of the gap between what this program is and what it could be. What the program actually is The Housing Choice Voucher Homeownership Program, administered by the U.S. Department of Housing and Urban Development, allows eligible HCV recipients to redirect their rental subsidy toward the costs of homeownership rather than rent. The program allows families assisted under the HCV program to use their voucher to buy a home and receive monthly assistance in meeting homeownership expenses. It is limited to first time homeowners who have received housing counseling and meet minimum income requirements. The mechanics are straightforward. Participants typically pay 30% of their income toward mortgage costs, while the voucher covers the remainder, the same structure used for rental assistance but applied to homeownership expenses instead. Time limits apply: assistance lasts up to 15 years for most participants, with no time limit for elderly or disabled families. The subsidy covers a broad range of homeownership costs, including mortgage principal and interest, property taxes, insurance, and in some cases utilities, essentially the same basket of costs the voucher would have covered in a rental situation, redirected toward building ownership rather than paying a landlord. The financial logic of this redirection is powerful and direct. Instead of rent payments that disappear permanently, monthly housing payments build equity, creating an asset that grows over time. As one Sacramento participant said: “For the first time, I feel like I’m investing in my future, not just surviving month to month.” That shift, from subsidizing a landlord’s asset to building the voucher holder’s own, is the core of what makes this program so significant and its underuse so consequential. Why almost nobody uses it The HCV Homeownership Program’s 10,000 closing track record over 25 years is not evidence that the program does not work. It is evidence that the program is barely being used. Several structural barriers explain why the gap between the program’s potential and its actual reach has remained so wide for so long. The first and most fundamental barrier is that participation is optional for local public housing agencies. All public housing authorities that administer the HCV program have the option to establish an HCV homeownership program in their community. The operative word is option. PHAs are not required to offer the homeownership program, and a significant number simply do not, whether due to administrative capacity constraints, lack of familiarity with the program requirements, staff bandwidth, or institutional inertia. The limited participation of PHAs presents a significant hurdle, not every housing authority offers the program, creating geographical barriers for many families. A voucher holder whose local PHA has not established a homeownership program has no path to use this option regardless of how well qualified they might otherwise be. The second barrier is awareness, or the near complete absence of it. The Section 8 homeownership program remains one of housing policy’s best kept secrets. This is not hyperbole. Most voucher holders have never been told the option exists. Many housing counselors and social workers who work with voucher holding families are unfamiliar with the program’s mechanics. Lenders who have never processed a homeownership voucher transaction may not know how to underwrite one. The information ecosystem around this program is so thin that even motivated, financially prepared voucher holders frequently hit dead ends simply trying to find someone who can explain how to proceed. The eligibility requirements add another layer of complexity. Beyond holding an active voucher, applicants must meet income thresholds, demonstrate steady employment history, typically 30 hours per week for at least one year, qualify as a first time homebuyer, and complete a HUD approved housing counseling program. The existing HUD PHA homeownership program has had very limited success, with most successful homebuyers having higher incomes. This reflects a real tension at the program’s core: the families most in need of a pathway out of long term rental dependency are often the ones who face the most difficulty meeting the income and employment requirements designed to ensure sustainable homeownership. The program is most accessible to voucher holders who have already made significant financial progress, not those at the earliest stages of that journey. What the program looks like in practice At the PHAs that have chosen to make the homeownership program available and have invested in making it work, the results are genuinely transformative. The Grand Rapids Housing Commission in Michigan, for example, has structured its program to provide not just administrative processing but active support, working with local lenders and realtors to guide participants through the full purchase process, from orientation meetings to closing. Once a family closes on a home, the housing commission sends a predetermined housing assistance payment directly to the family each
Homeownership Part 8: Billions in Down Payment Assistance Exist. Almost Nobody Knows.
Ask most aspiring homeowners what is standing between them and a purchase, and the answer comes back quickly and consistently: the down payment. Not the monthly mortgage payment, which for many buyers would actually be comparable to or lower than their current rent. Not the interest rate, frustrating as rates have been. The down payment, that large, upfront sum required before a buyer can even get to the table, is the wall that most people hit first, and for millions of aspiring owners, it is the wall they never get past. The assumption baked into that frustration is understandable but, for a significant share of buyers, incorrect. There is money available to help with down payments. A lot of it, spread across thousands of programs at the federal, state, and local level, administered by housing finance agencies, nonprofits, municipalities, and financial institutions. Programs that offer outright grants that never need to be repaid. Programs that offer forgivable loans that disappear after a few years of residency. Programs that cover not just down payments but closing costs, rate buydowns, and other upfront expenses that derail purchases before they start. The money exists. Most of the people it was designed to help have never heard of it. That gap between available funding and actual use is not a minor inefficiency. It is one of the most consequential and least discussed failures in the American homeownership system. The scale of what’s available As of April 2026, there are 2,679 homebuyer assistance programs available nationwide, up from 2,619 in the previous quarter. Support for first-time buyers remains strong, with 1,666 programs, 62% of all available programs, specifically available to those entering the market for the first time. These programs are not concentrated in a handful of high-cost coastal states. Every U.S. county has at least one down payment assistance program, and more than 2,000 counties have 10 or more available. California leads with 353 programs from 223 providers, Florida has 196 from 128 providers, and Texas offers 128 programs from 63 providers. DownpaymentresourceHousingWire The range of what these programs offer is substantial. At the federal level, FHLBank Chicago’s Downpayment Plus program, which launched $28 million in 2026 grants for Illinois and Wisconsin, provides eligible households with up to $10,000 in forgivable assistance applied at closing, with grants forgiven on a monthly basis over a five-year retention period. The assistance is provided as a forgivable grant paid on behalf of the borrower at the time of closing, and a companion program extends access to homebuyers participating in nonprofit-led homeownership programs. Fhlbc State-level programs go significantly further in many cases. New York City’s HomeFirst program offers eligible first-time buyers up to $100,000 toward the down payment or closing costs. In Nevada, Federal Home Loan Bank–backed assistance programs can reach $50,000 in grant support. Across multiple states, buyers can access forgivable second mortgages, deferred-payment loans, and targeted assistance tied to occupation or income level. New York City + 2 The result is a system that, on paper, contains substantial financial support for entry into homeownership. The challenge is not absence of programs. It is fragmentation and visibility. The gap between eligible and enrolled With thousands of programs and billions in funding, usage would be expected to be high. It is not. The gap between eligibility and participation is one of the clearest signals that the system is not functioning as intended. Analysis of HMDA data found a gap of nearly 65 percentage points between eligible borrowers and actual program participation, suggesting that most qualified buyers never access assistance. Among conventional borrowers, about 44% were eligible for down payment assistance, yet fewer than 10% used it. HousingWire That means the majority of buyers who could have reduced upfront costs significantly did not. Not because they were denied, but because the pathway never reached them. Industry leaders consistently point to awareness as the central issue. Many buyers simply do not know these programs exist. Others assume they will not qualify. Some discover them too late in the process, after financing terms are already set. As Rob Chrane of Down Payment Resource has noted, eligibility often goes unused because buyers never encounter the information at the right stage of the transaction. New American Funding This is not just a consumer education gap. It is a structural delivery gap in how assistance is integrated into mortgage origination itself. Who the gap affects most The consequences of this disconnect are not evenly distributed. First-generation buyers, lower-income households, and buyers of color are the most affected, largely because they are least likely to have access to informal guidance networks that explain how the system works. Harvard’s Joint Center for Housing Studies has estimated that a $25,000 down payment intervention could meaningfully increase Black and Hispanic homeownership by over 1.1 million households. National League of Cities Yet the very households that would benefit most are often the least connected to lenders, counselors, or financial advisors who routinely surface these programs. Instead, many enter the market assuming they must reach a full 20% down payment on their own, a standard that has never reflected the reality of available assistance. Even when programs are technically accessible, complexity becomes a barrier. Each program has its own eligibility rules, income caps, property restrictions, and application steps. Without guided navigation, many buyers abandon the search entirely. How assistance is meant to function Down payment assistance is not a single system but a network. Programs are distributed across federal, state, and local institutions, often accessed only through participating lenders or housing counselors. In practice, this means a buyer must be working with a lender who is both aware of and enrolled in specific programs. If not, the assistance remains invisible. HUD-approved housing counselors often serve as the most reliable entry point, offering structured guidance at no cost. State housing finance agencies also maintain searchable program databases. Tools like Down Payment Resource attempt to unify fragmented listings into a usable system. Homebuyer education courses, which are required in many cases,
Homeownership Part 7: Community Land Trusts: The Quiet Model That Actually Works
Every conversation about the housing affordability crisis eventually arrives at the same impasse. Home prices are too high. Wages haven’t kept up. Down payments are out of reach. Mortgage rates are elevated. Supply is short. The problems are well-documented, endlessly discussed, and, from the perspective of most aspiring homeowners, maddeningly resistant to solution. What rarely gets discussed with the same urgency is the question of whether the standard model of homeownership itself, the one where a buyer purchases land and structure together at full market price, is the only model worth pursuing. It isn’t. And the alternative that has been quietly demonstrating results for decades deserves far more attention than it typically gets. Community Land Trusts — CLTs — are nonprofit organizations that permanently remove land from the speculative market, hold it in trust for the benefit of a community, and sell the homes sitting on that land to income-eligible buyers at prices that reflect the cost of the structure rather than the full market value of the combined property. The buyer owns the home. The CLT owns the land. The result is a purchase price that is often dramatically more affordable than anything available on the open market, and a model of ownership that has proven more stable, more equitable, and more durable than conventional homeownership in almost every metric that matters. Where the model came from The origins of the CLT model in the United States are rooted directly in the civil rights movement. The first modern CLT in the United States was established in Albany, Georgia, in 1969 by Robert Swann and Slater King. Born out of the civil rights movement, the New Communities land trust consisted of more than 5,000 acres of farmland where African-American families, many of them poor farmers from the South, could affordably access, build on, and farm land at a time when the community faced significant obstacles to land ownership and financing. The CLT was not designed as an idealistic experiment or a fringe alternative to mainstream homeownership. It was a practical response to a specific and urgent problem: a community that was systematically excluded from conventional land ownership needed a model that could work around those exclusions while building long-term stability. That founding purpose, advancing racial equity and community stability in the face of a market that was working against marginalized communities, remains central to the CLT movement today. There are now hundreds of active community land trusts operating across the United States, with steady growth over the past decade. The expansion is not concentrated in places where housing is traditionally cheapest. It is happening in regions where affordability has become increasingly strained, pushing policymakers and communities to explore structural alternatives. How it actually works The mechanics of the CLT model are straightforward, even if they require a shift in how most people think about property ownership. When a buyer purchases a CLT home, they pay only for the structure, the actual building, at a subsidized price that reflects their income and the CLT’s affordability mission. The land beneath the home is leased to the buyer through a long-term ground lease, typically renewable every 99 years, at a modest monthly fee. Because the purchase price is substantially lower, the mortgage is smaller, and the monthly payment is more manageable, often significantly so, even in markets where standard homeownership is completely out of reach for moderate-income earners. The buyer builds equity in the home as they pay down the mortgage, and they are entitled to a share of any appreciation in the home’s value when they sell. The share is defined by a resale formula that varies across CLTs, but is generally designed to allow the homeowner to capture a fair return on their investment while ensuring the home remains affordable for the next buyer. Homeowners build wealth in two ways: through the forced savings of paying down mortgage principal, and through the share of appreciation allocated under the resale formula. The equity accumulated is more modest than in market-rate ownership, but it is real, stable, and insulated from extreme market volatility. The strict formulas CLTs use to calculate resale values effectively remove these properties from speculative market swings, providing protection during downturns while preserving long-term affordability. The stepping stone most people don’t know about Perhaps the most compelling feature of the CLT model is what happens after ownership. While often framed as a permanent alternative to market-rate housing, in practice it frequently functions as a stepping stone. A significant share of CLT homeowners eventually transition into market-rate ownership. The CLT provides an entry point into homeownership that would otherwise be inaccessible, allowing buyers to build credit history, accumulate savings, and establish equity. That foundation can then be leveraged into conventional housing opportunities that were previously out of reach. In many cases, initial investments required to enter CLT ownership are relatively small compared to traditional down payments, and the equity gained over time, though modest, becomes meaningful when applied toward a later purchase. For many households, the CLT is less an endpoint than a bridge into broader housing stability. What the data shows about stability Beyond affordability, CLTs demonstrate strong performance in housing stability. Homeowners in CLTs are significantly less likely to experience foreclosure or delinquency during market downturns compared to conventional homeowners in similar income brackets. This resilience is not accidental. CLTs typically provide pre-purchase education, structured underwriting, and ongoing support to homeowners after purchase. This relationship-based model allows early intervention when financial stress emerges, preventing issues from escalating into default. During the 2008 housing crisis, CLT homeowners experienced far lower foreclosure rates than the broader market. The model’s combination of affordability, education, and ongoing stewardship created a buffer against the shocks that destabilized conventional homeownership. Research also indicates that CLTs contribute to neighborhood stability. Rather than depressing surrounding property values, CLTs often help stabilize or even increase nearby home prices by reducing vacancy, preventing distress sales, and maintaining long-term affordability in areas under pressure from speculation. The growth that
Homeownership Part 6: Your Home Is Worth Less Because of Who You Are
Imagine spending months saving for a down payment, navigating a competitive market, securing a mortgage, and finally closing on a home you are proud of. Imagine investing tens of thousands of dollars in renovations over the years, watching the neighborhood around you appreciate, and then calling an appraiser to refinance at a better rate, only to be handed a valuation that bears almost no relationship to what comparable homes in the area are actually worth. Imagine suspecting that the number is low because of your race. Imagine having that suspicion confirmed. This is not a hypothetical. It is the documented, tested, and financially quantified reality of what appraisal bias does to Black homeowners across the United States, and it is happening right now, inside a system that has yet to be fundamentally reformed. What the research actually shows The data on appraisal bias has accumulated steadily over the past several years to a point where its existence is no longer seriously disputed by credible researchers. What remains contested is the scale of its contribution to the broader devaluation of homes in Black neighborhoods, a distinction that matters for policy, but does not change the central finding that the bias is real, documented, and costly. Brookings Institution research found that homes in Black neighborhoods are valued roughly 21% to 23% below what their valuations would be in non-Black neighborhoods. Appraisal bias explains approximately 9% to 19% of that devaluation, depending on modeling approaches. Appraisal transactions in majority-Black neighborhoods are significantly more likely to be appraised under the contract price than homes in majority-white neighborhoods. At the neighborhood level, the cost of devaluation across major metro areas amounts to roughly $162 billion. That is not a rounding error in the housing market. It is a massive drain on Black wealth, accumulated over years of a system that routinely assigns lower values to the same physical structures based on who lives in them and where they are located. Even when Black Americans do own homes, their median home value sits significantly below the national median. That gap does not exist because Black homeowners are purchasing inferior properties or maintaining them less carefully. It exists because the mechanism used to establish home values has built into it a set of assumptions and practices that consistently produce lower numbers for homes in Black communities. Lower appraisals mean lower equity. Lower equity means less borrowing power, less capacity to fund home improvements, less collateral for other financial goals, and ultimately less wealth to pass on, in a country where home equity is the cornerstone of middle-class financial stability. The methodology that makes bias possible Understanding how appraisal bias works requires understanding how appraisals work. The dominant methodology in residential real estate valuation is the sales comparison approach, where an appraiser determines a home’s value primarily by comparing it to recent sales of similar properties in the same area. The approach sounds neutral, and in theory it is meant to be. In practice, it encodes historical inequities directly into current valuations. The origins of appraisal bias date back to the 1930s, when federal housing policy classified predominantly Black neighborhoods as high risk. Those classifications shaped lending access, investment patterns, and long-term property values. When comparable sales in a neighborhood reflect decades of disinvestment and depressed property values, any appraisal methodology that relies heavily on those comparables will reproduce those lower numbers in perpetuity. The bias does not need to be conscious or intentional to be structural. The system can produce racially unequal outcomes through processes that appear entirely objective on their face. An additional structural factor is the composition of the appraisal workforce itself. The profession remains overwhelmingly white, with Black appraisers representing a very small share of the field. A system this homogeneous, applying discretionary judgment in a process that directly affects the wealth of communities of color, is not well-positioned to consistently identify or correct bias. Research shows that lower appraised values for Black-owned homes persist even after controlling for a wide range of variables and individual appraiser effects. The pattern is not confined to a few actors. It is systemic. The families who proved it Some of the most compelling evidence of appraisal bias comes from homeowners who tested it directly. In multiple documented cases, families received low appraisals, removed visible indicators of race from their homes, and had a different person present the property for a second appraisal. In those instances, valuations increased significantly, in some cases by more than 40%. Other investigations have produced similar findings. Controlled testing has shown that homes associated with Black ownership are consistently valued lower than identical homes presented under white ownership conditions. These results are not statistical abstractions. They are real transactions, with real financial consequences, demonstrating how perception can directly influence valuation outcomes. A reform effort that was dismantled Federal efforts to address appraisal bias gained momentum in the early 2020s through interagency initiatives aimed at improving transparency and accountability in valuation practices. These efforts sought to standardize data collection, create mechanisms for challenging valuations, and examine structural inequities in the appraisal process. In 2025, those initiatives were effectively discontinued, halting much of the federal coordination that had been underway. The policy shift did not eliminate the underlying issue. It removed the primary federal structure tasked with studying and addressing it. In response, new legislation has been introduced to modernize appraisal practices, increase transparency in valuation data, and give homeowners a formal mechanism to appeal potentially biased appraisals. These proposals represent incremental progress, but they stop short of addressing the full structural depth of the problem. What is actually at stake It is important to be precise about what appraisal bias represents. It is not about isolated misconduct, nor is it about occasional error. It is a documented pattern in which the same property yields different valuations depending on the racial context in which it is appraised. Over time, across millions of transactions, those differences accumulate into measurable disparities in household wealth. As one
Homeownership Part 5: The 30-Point Gap That Won’t Move
In 1968, Congress passed the Fair Housing Act. It was a landmark moment, a formal, legal declaration that discriminating against someone in the sale, rental, or financing of a home on the basis of race was no longer acceptable in the United States. After decades of codified exclusion, after redlining and restrictive covenants and a housing market built around segregation, the law drew a line and said: no more. More than fifty years later, the gap between white and Black homeownership rates is wider than it was when that law was signed. That sentence deserves to be read slowly. Not slightly larger. Not roughly equivalent. Wider. In 1968, the gap between white and Black homeownership was 27 percentage points. By 2026, that gap has grown to 28.4 points. White homeownership sits at around 71.6%, while Black homeownership stands at just 43.2%. Half a century of civil rights legislation, fair lending enforcement, community reinvestment initiatives, and targeted homeownership programs, and the needle has not just failed to close the gap, it has moved in the wrong direction. That is not a minor policy failure. It is one of the most significant and underacknowledged indictments of American housing policy in the modern era. What the numbers represent beyond percentages Numbers like these are easy to encounter and difficult to absorb. A 28-point gap in homeownership rates is not simply a statistical imbalance. It represents a compounding shortfall in wealth, stability, and opportunity that reproduces itself across generations with remarkable persistence and force. Homeownership remains the cornerstone of wealth in America, accounting for roughly 68% of total household net worth for the average family. When that pathway is obstructed, it does not just limit where one can live, it defines how one’s children will live. According to the Federal Reserve’s 2024 Survey of Consumer Finances, the median net worth of white families exceeds $285,000, compared to just $45,000 for Black families. That six-to-one wealth disparity is not explained by differences in effort, intelligence, or aspiration. It is the compounded financial residue of generations systematically denied access to the primary wealth-building vehicle that American society has made available to its citizens. The overall Black homeownership rate slipped to 43.9% in mid-2025, while the white rate hovered around 74%. Redfin chief economist Daryl Fairweather noted that Black millennials and Gen Zers are bearing the brunt of the racial homeownership gap because since they have reached homebuying age, the country has faced significant financial challenges and a major housing supply shortage. The young people who should be driving new Black homeownership growth are entering the market at a moment of maximum difficulty, high prices, elevated mortgage rates, scarce inventory, with less generational wealth to draw on and more systemic friction to navigate than their white counterparts of the same age. How the gap was built To understand why the gap persists, you have to understand how it was constructed, not as an accident or a byproduct of neutral market forces, but as the deliberate result of government policy and private practice working in coordination over several decades. Redlining is the most well-known mechanism. Starting in the 1930s, the Home Owners’ Loan Corporation systematically graded neighborhoods across the country, labeling communities with significant Black populations as “hazardous” and marking them in red on maps that banks and mortgage lenders used to determine where they would and would not extend credit. The effect was to starve entire neighborhoods of mortgage capital, making it nearly impossible for Black families to buy in those areas and equally difficult to sell, since no buyer could obtain financing. Property values in those communities stagnated, investment dried up, and infrastructure deteriorated, not because of anything the residents did, but because federal policy had made their neighborhoods financially untouchable. The GI Bill, often celebrated as one of the most transformative pieces of social legislation in American history, extended these inequities rather than correcting them. Though the bill helped white Americans prosper and accumulate wealth in the postwar years, it did not deliver on that promise for Black veterans who had served in segregated ranks. The GI Bill relied on the same redlined maps to determine where mortgages could be insured and offered. In Mississippi, a survey of 13 cities found that only 2 of the 3,229 VA loans issued in 1947 went to Black homebuyers. The largest federally subsidized wealth transfer in American history, the creation of the postwar middle class through suburban homeownership, was administered almost exclusively to white families. The long-term consequences of that exclusion are still being lived. What this created was a structural divergence that has proven extraordinarily difficult to reverse. White families who bought homes in the 1940s and 1950s, often with federal assistance, in newly constructed suburbs with good schools and appreciating property values, passed equity, security, and down payment capacity to their children and grandchildren. Black families who were denied that same access passed forward the absence of it. The gap in homeownership today is not merely a reflection of current market conditions. It is the balance sheet of a debt that has never been paid. The barriers operating right now If the historical exclusions had simply stopped without any ongoing structural disadvantages, the gap might have closed on its own over time. But the barriers to Black homeownership did not end with the Fair Housing Act. They evolved, adapted, and in some cases intensified. Mortgage denial rates remain starkly unequal. According to the National Association of Realtors’ 2025 Snapshot of Race and Home Buying, Black mortgage applicants face a denial rate of 21% and Hispanic applicants face a denial rate of 17%, compared to just 11% for white applicants and 9% for Asian applicants. These are not differences explained by creditworthiness alone. Research consistently finds that racial disparities in mortgage denial persist even after controlling for income, credit score, and loan-to-value ratio. The system is producing unequal outcomes for equal applicants, and the downstream consequences for homeownership accumulate year after year. Appraisal bias is another
Homeownership Part 4: The Insurance Crisis Nobody Is Connecting to the Housing Crisis
When people talk about what’s making homeownership unaffordable in America, the conversation almost always lands on the same handful of explanations: home prices, mortgage rates, down payments, and housing supply. Those are real problems, each worthy of serious attention. But there is another force working quietly against both aspiring and existing homeowners that rarely makes it into that conversation, one that can block a purchase before it starts, destabilize a mortgage that was already being paid faithfully, and in the worst cases, trigger the loss of a home that a family worked for years to keep. That force is the home insurance crisis. And it is far more connected to the housing affordability problem than most coverage of either subject acknowledges. A market in serious trouble The numbers describing the state of home insurance in America are striking, and they’ve moved fast. Homeowners insurance premiums rose by 64% nationwide between 2021 and 2025, nearly four times more than they did in the previous five-year period. That is not a modest adjustment to reflect changing costs. That is a fundamental repricing of what it costs to protect a home, happening in a compressed window of time that has left millions of homeowners scrambling to absorb increases they did not budget for and often cannot avoid. The premium spike is only part of the story. A recent survey of home buyers and sellers found that nearly half of respondents encountered issues with home insurance during a transaction, while 21% reported that a deal fell through entirely because of it. In states like Louisiana, 30 to 40% of mortgage loans fail because of high home insurance costs. These are not edge cases or regional anomalies. These are mainstream, widespread market failures affecting buyers and sellers across the country, deals collapsing not because of credit problems or appraisal disputes, but because the insurance required to close simply cannot be obtained at a price the transaction can bear. The mechanism connecting insurance to the purchase process is often misunderstood, but it is direct and unforgiving. While the 30-year fixed-rate mortgage has traditionally given homeowners stable and predictable payments, this stability is now being undermined. As premiums surge, mortgage payments, which in most cases include insurance through escrow, become increasingly less affordable and more unpredictable for millions of homeowners. A buyer who qualifies for a mortgage based on projected monthly costs can find themselves priced out of their own purchase when the insurance quote comes back significantly higher than anticipated. The mortgage math clears. The insurance math doesn’t. The deal dies. From pricing crisis to coverage crisis The problem has moved beyond cost alone into something harder to solve, availability. In an increasing number of markets across the country, private insurers are not simply charging more, they are leaving. Insurers facing higher risk profiles are cutting coverage, refusing renewals, or restructuring their policies in ways that shift risk onto homeowners. Those left without coverage, or forced to rely on state insurers of last resort, end up with the most to lose when a natural disaster strikes. After the devastating California wildfires, it was revealed that many of those affected had their policies canceled by their insurer only months before the disaster. The state-backed insurers of last resort that step in when private markets retreat are not a comfortable backstop. They are expensive, limited in what they cover, and were never designed to absorb the volume of policyholders now depending on them. Excess and surplus lines policies, which typically come with higher premiums and fewer consumer protections, have emerged as coverage options for properties that private insurers will no longer touch. In California, Florida, and Texas, these products accounted for roughly 16% of policies by December 2025, up from under 2% in 2023. In the span of two years, a significant portion of homeowners in three of the country’s largest states shifted from standard private coverage to a less protected, more expensive alternative, not by choice, but by necessity. The force-placed insurance trap One of the least discussed mechanisms by which insurance costs can destabilize a homeowner’s financial situation is force-placed insurance, sometimes called lender-placed insurance. Most homeowners have never heard of it until it happens to them, and by then, the financial damage has often already begun. When a homeowner’s insurance policy lapses, whether because a premium went unpaid, a policy was canceled by the insurer, or coverage was deemed insufficient, the mortgage lender is legally required to protect its financial interest in the property. The lender steps in with a force-placed insurance policy, pays the premium upfront, and then adds the cost to the borrower’s monthly mortgage payment. If the borrower cannot pay, the lender can initiate foreclosure proceedings. The homeowner does not choose this policy, does not select the insurer, and has no ability to shop for a better rate. The lender picks the company and passes the cost along. The cost involved is not comparable to standard insurance. Force-placed insurance is more expensive than a standard homeowner’s policy and can cost four to ten times more. And it provides dramatically less protection than what the homeowner previously had. Force-placed insurance covers only the loan’s remaining balance, not the actual property value. It does not cover personal property or liability claims. If a property is valued at $500,000 with a remaining mortgage balance of $15,000, the force-placed policy would likely provide only $15,000 in coverage. In other words, the homeowner pays far more for far less, a policy that protects the bank and leaves them exposed. The path from force-placed insurance to foreclosure is shorter than most people realize. A homeowner whose monthly mortgage payment suddenly increases by hundreds of dollars due to a lender-placed insurance premium, with no warning and no ability to opt out, may miss a payment. That late payment triggers additional fees and damage to credit. Many homeowners are surprised to learn that a lapsed insurance policy can trigger a costly lender-placed policy added directly to their mortgage balance,
Homeownership Part 3: When You Own Your Home But Can’t Afford to Keep It
The story of homeownership in America has always been told as a story of arrival. You save, you sacrifice, you get your keys, and from that point forward you are building something, equity, stability, a foundation for your family’s future. The mortgage payment becomes the finish line. Everything after that is the reward. That framing leaves out a chapter that an increasing number of homeowners are living through right now. The chapter that comes after the closing. The one where the costs don’t stop, they just change form. Where the monthly mortgage payment, fixed and familiar, is joined by a growing roster of expenses that don’t stay fixed at all. Where people who did everything right, who bought responsibly and paid faithfully for years, find themselves financially squeezed not by a loan they couldn’t afford, but by costs they never saw coming. It is a quiet crisis happening inside what is supposed to be the ultimate financial achievement, and it is affecting tens of millions of American households. The numbers that define the problem The Harvard Joint Center for Housing Studies put the shape of this problem into clear relief in a 2025 research brief that deserves far more attention than it received. While mortgages remained the largest single housing expense for most homeowners, non-mortgage costs, home insurance, property taxes, utilities, and routine home maintenance, have increased more rapidly since the pandemic. This has raised costs and burden rates even for homeowners who have locked in historically low interest rates on their mortgages. That last detail is critical. These are not people who stretched to buy more than they could afford. These are people who bought conservatively, secured low rates, and are still struggling, because the costs surrounding the mortgage have outpaced what their incomes can absorb. The number of homeowners with cost burdens, defined as paying more than 30% of their income on housing costs, rose by 650,000 households in 2023 to a total of 20.3 million, representing 23.7% of all homeowner households. Nearly one in four homeowners in the United States is now spending more than the federally recognized threshold of affordability on the basic costs of keeping their home. And the trend is moving in the wrong direction. Median monthly owner costs for U.S. homeowners with a mortgage increased to $2,035 in 2024, up from $1,960 the year before, a 3.8% increase that outpaced the prior year’s growth rate. The hidden costs add up to a figure most prospective buyers never see in their pre-purchase calculations. According to Bankrate’s 2025 analysis, the average homeowner spends $8,808 per year on maintenance alone, nearly double the $4,494 spent on utilities and energy, double the $4,316 in annual property taxes, and four times the average $2,267 in home insurance premiums. Add those figures together and the total approaches $21,000 per year in non-mortgage costs, costs that don’t appear in the mortgage payment, don’t show up in affordability calculators, and rarely come up in conversations about whether someone can afford to buy. Nearly half of homeowners in Bankrate’s 2025 survey who expressed regret about buying cited maintenance and hidden costs as being more expensive than expected, making it the single most common source of homebuyer remorse. Who is bearing the heaviest weight The burden of rising ownership costs is not distributed evenly, and understanding who is most affected matters for how we think about solutions. Cost burdens are disproportionately faced by Black and Hispanic homeowners and are rising most rapidly for single-person and single-parent households who rely on a single income to cover housing costs. For households where one paycheck has to cover everything, the mortgage, the insurance spike, the property tax increase, the broken furnace, there is no financial buffer to absorb an unexpected cost increase. One bad year of insurance premiums or one major repair can tip a household from burdened to severely burdened, defined as spending more than 50% of income on housing. Between 2019 and 2023, 1.7 million homeowners aged 65 and over became cost-burdened, accounting for 47% of the total increase in burden nationwide. This brings the total number of burdened senior homeowners to 7.9 million, or 27.6% of all homeowners in that age group. This is a particularly acute dimension of the problem because older homeowners on fixed incomes have almost no mechanism to increase their revenue when costs rise. They cannot take on extra work. They cannot renegotiate a pension. They own their homes outright in many cases, meaning the mortgage finished decades ago, but the costs of insurance, taxes, utilities, and maintenance have grown to absorb what should have been the most financially comfortable chapter of their lives. The cost burden rate for the 11 million homeowner households earning below $30,000 per year reached 74.2% in 2023, the highest rate recorded in over 20 years, surpassing even the previous peak following the Great Recession. Three quarters of the lowest-income homeowners in America are spending more than 30% of what they earn just to stay in their homes. This is not a marginal problem or a regional curiosity. It is a widespread, worsening condition that the standard housing affordability narrative, focused almost entirely on purchase prices and mortgage rates, consistently fails to capture. The forces driving costs upward Several distinct pressures are converging to push non-mortgage ownership costs higher, and they are unlikely to reverse on their own. Insurance is perhaps the most visible. The average annual cost of home insurance rose 12% in 2025 and is projected to rise another 4% in 2026, driven in part by rising rebuilding costs and growing climate-related risks including hurricanes, floods, and wildfires. Homeowners in climate-exposed regions, coastal areas, wildfire zones, flood plains, are seeing premium increases that are not modest adjustments but structural repricing of risk. In some markets, insurers have withdrawn entirely, leaving homeowners with state-run last-resort coverage that is both more expensive and less comprehensive than private alternatives. Climate costs extend beyond insurance. A National Bureau of Economic Research study found that American