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Buying, Finance

The Housing Affordability Crisis and Proposed Changes That Can Help

With over 15 million millennials experiencing monumental student loan debt, the combination of that and rising home prices has created a housing affordability crisis. Here are some proposed changes to help ease the rising problem.

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If you ask just about anyone trying to buy a home, they’ll probably tell you homes aren’t affordable. This is especially true in highly competitive markets where we have seen double digit price growth in one quarter alone which leads to housing affordability declines in many areas. It’s not uncommon for buyers to experience multiple-offer situations that spur bidding wars and over-appraisal purchase prices, and with over 15 million millennials experiencing monumental student loan debt, the combination of rising home prices and debt has created a housing affordability crisis that many have taken note of across the nation.

In fact, Lawrence Yun, Chief Economist for the National Association of Realtors expresses his concern“If homeownership isn’t rising, the wealth divide will expand between the haves and have-nots and if [the homeownership rate] continues to lag behind historical norms one has to wonder, ‘Are we turning into a renter nation?” Yun said. As more and more homebuyers struggle to compete in today’s market, many are urging solutions that will curb the crisis and provide relief for many first-time homebuyers.

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Proposed Changes To Ease The Affordability Crisis

The recent policy forum from NAR focused solely on the housing affordability crisis and their suggestions were aimed at easing the burden on first-time homebuyers. Many of these proposed changes require government intervention, but NAR believes there would be widespread relief from their proposals.

Yes, In My Backyard Movement

NAR supports the incentivization of ‘Yes in My Backyard’ markets to encourage states and localities receiving federal dollars to reform high-density zoning.” By promoting “YIMBY,” real estate developers can offer a critical solution that helps neighborhood growth as well as redesigning under-performing or unused real estate. Multi-family housing, such as condos, can be a more affordable entry into homeownership for some, and an emphasis on such developments can be one method to easing the housing affordability crisis.

Improved FHA Underwriting Criteria

Almost 1 in 5 homebuyers utilized an FHA loan in 2019 and for many first-time homebuyers, an FHA loan is a popular choice if you get approved because of its minimal down payment. The National Association of Realtors continues to champion for improved FHA underwriting which would allow more future homebuyers to get FHA loan approval. In fact, due in large part to NAR’s advocacy, HUD announced in the 4th quarter of 2019 that they have improved FHA loan regulations for condo purchases. However, NAR continues to advocate for even more improved FHA underwriting, including for single-family home purchases.

Additional Community Development Block Grants

While the federal government can create legislation that promotes and eases homeownership, some of the existing challenges are specific to the municipal level and require unique solutions. This is where HUD has created the Community Development Block Grant program. While there are currently several programs under the CDBG umbrella, NAR believes more incentive programs will help spur homeownership at the local level while also solving complex or unique community hurdles. These programs focus on providing grants that will specifically help “the most vulnerable in our communities,” the group potentially most in jeopardy of never being able to afford a home.

More Investors Utilizing The Opportunity Zone Program

A semi-new program created by the government, Opportunity Zones, offers tax incentives to real estate investors that revitalize in designated distressed areas. The goal of the Opportunity Zone program is “to spur economic development and job creation in distressed communities” which could increase buying power among residents in those designated zones. While this program was created in 2017, some investors may still be unaware of potential tax benefits associated with this program. As always, it’s important to consult a tax professional to learn more about this program.

Current Options Available To Homebuyers

If you’re finding yourself experiencing this housing affordability crisis, there are existing programs and options available. From programs that help with down payments,  options designated for veterans, to programs that assist with closing costs. To learn more about programs that are available near you, find a Realtor in your area and consult a loan officer to better explore your options.


If you’re looking to buy, sell, or rent, visit where there’s free, step-by-step guides that will walk you through the entire process. You can also visit our blog for any questions you might have about being a homeowner, renter, or seller.



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Jennifer is an accidental house flipper turned Realtor and real estate investor. She is the voice behind the blog, Bachelorette Pad Flip. Over five years, Jennifer paid off $70,000 in student loan debt through real estate investing. She's passionate about the power of real estate. She's also passionate about southern cooking, good architecture, and thrift store treasure hunting. She calls Northwest Arkansas home with her cat Smokey, but she has a deep love affair with South Florida.