Over the past few weeks, we have focused on providing information about the housing market and industry, as it is so critical to the economy and the moving industry. We discussed the obvious issues, such as the lack of sufficient inventory, extremely high home prices and interest rates, and the worsening job market. Today, we zero in on the exact issues that would-be homebuyers are facing, underlying causes, and potential fixes. Our hearts break for people who just want to own their own home. First-time homebuyers now only represent 20% of current home purchases, which is a record low. This is one-half the amount of a generation ago.

The Middle Class Squeeze

The middle class is really getting squeezed. The term "middle class" is a term that gets thrown around quite a bit, but few know what it actually means. The middle class is defined as those earning two-thirds to two times the real median household income of $80,600 (as defined by the U.S. Census Bureau), which means the "middle class" earns between $53,000-$161,000. To buy a median (average) priced home currently, Americans need to earn around $141,000, which is a huge difference from the $80,600 they are currently averaging. Hence the problem.

What’s Driving the Cost of New and Existing Homes?

  • Regulations: According to the President of the NAHB (National Association of Home Builders), 24% of the cost of building a new home is regulations (local, state, and federal governments). That equals almost $94,000 on average. That is insane!

Cost of Materials

  • Since COVID, the costs of every major building material, lumber, steel, concrete, and drywall, have risen sharply. Some prices have eased, but remain significantly above pre-COVID levels, while others continue to climb steadily. The moving industry has seen the same increases in the products we use.

"Hidden Costs"

  • Insurance, taxes, and ongoing maintenance now average around $16,000 per year for current homeowners, with the cost around $20,000 for coastal areas.
  • The breakdown is: ongoing maintenance $11,000, insurance $4,600, and property taxes $3,000. Insurance is up almost 48% since 2020.

What Can Be Done?

Build Smaller Homes

  • 3-bedroom single homes have increased in popularity every year since 2011 and now represent 47% of new homes being built.

Remodel

  • If you need a larger home or nicer accommodations, remodeling is a much cheaper option than buying a pricey home. Homebuilders have jumped into the remodeling business. Over the past 25 years, remodeling homes has almost doubled, from 69,000 to 128,000. Remodeling now makes up over half (56%) of residential construction.

Cut the Red Tape

  • If the government really wants to make homes affordable, it can cut the crap big time with regulations, permit fees, and other associated costs. We get that some local governments regulating home development in certain areas require that homes need to be built properly, but other than that, there are plenty of other ways to collect revenues than this insanity!
  • Have more state and local programs that offer down payment assistance and tax incentives to purchase a home. We strongly endorse this, and it is long overdue! Base it on household incomes. It’s also okay if the federal government finally steps up and helps, as this issue has been ignored for many years.

Planning a Long-Distance or Interstate Move? We’re Here to Help

If buying a home has become difficult where you live and you’re considering relocating to another state for affordability, work opportunities, or a fresh start, we at O’Brien’s Moving & Storage are here to help make that transition smooth and stress-free. Long-distance moving is our specialty, and we understand the challenges families face when relocating across state lines.

  • Trusted interstate and long-distance moving services
  • Professional packing, loading, and secure transportation
  • Experienced in coordinating multi-state relocations
  • Clear communication and dependable delivery schedules
  • Tailored moving plans designed around your needs and destination

As an Allied Van Lines agent, we’ve helped countless families move safely and efficiently throughout the U.S. If you’re preparing for an out-of-state move, let our experienced team handle the details while you focus on your next chapter.