Political and Economic Analysis on Housing and the Affordability of Housing
Housing Policy Economic Analysis October 2026
James McBride Sterrett
October 27th, 2026
Problem:
According to the data, the mean vacancy rate for single-bedroom apartments is 7%. The mean vacancy rate for two-bedroom apartments is 8%. For three-bedroom or more units, the average vacancy is 9%. The average year apartments were built is 1970. Privately owned housing units that were constructed over the last year total an adjusted rate of 1.4 million housing units. That is 3% lower than the annual rate of construction in September 2025. Through August 2026, for the past year, the average rate of house prices rose 2.1%. However, home prices fell for the 15th consecutive month compared to inflation, which was 3.4%. Sales of previously owned homes increased in September month over month but decreased compared to a year prior. Sales have fallen 2.2% from the year prior. Home sales have been around a 4 million annual pace since 2023. Home prices have increased 1.3% from a year earlier and cost 417,500$ a month on average. The average mortgage rate in the United States is now 7.4%, which is the highest rate in almost three years. There are currently 1.6 million homes on sale currently, which is the highest since November 2019; There currently was an increase in unsold inventory by 1.9%. The problem is that there is a demand for more affordable housing, there is a demand for more homes, there is a demand for cheaper rents, and that there are a severely largely portion of Americans who are housing burdened.
Analysis:
The fact that the average vacancy rate for single-bedroom apartments is 7% and the median is 0% shows that there is a severe crunch on single-bedroom apartments and that additional apartments built would be in high demand. This shows that the building of single-bedroom houses is incredibly important because the vast majority of complexes have 0% vacancies. There are also 22 million households that rent apartments and spend more than 30% of their income on housing, which qualifies them as housing-burdened. At the same time, mortgage rates for houses are at 7.4%, which is a drastically damaging high number and may be the new normal. The rising housing supply in America means that the new houses that are built should be on the more affordable side in order to be more affordable to potential buyers with the higher mortgage rates. The low vacancy rate of apartments suggests that building multifamily affordable housing is incredibly important, is in high demand, and will help solve the housing crisis.Solution:
Additional solutions include removing superfluities and unnecessary construction barriers/regulations to affordable housing in areas of high demand/ high price pressure. Additional measures could include the government subsidizing loans to build affordable housing units while still at a profitable loan rate. Another potential solution could be creating a tariff exemption for materials for affordable housing that cannot easily be produced in the United States. Another idea would be to import construction and building materials for high-demand resources that are required for affordable housing. The way to do this would be for United States companies or the United States government to make a deal with allies’/ trading partners for importing key resources at a discount. Other ideas would be to increase production of key resources needed to build housing in the United States. Examples include tree farms, aluminum mines, steel mines, glass factories, and other key resources needed to build affordable housing. While that is a long-term solution, the key now would be for the United States government to invest in companies that already produce those resources in the United States and permit their expansion. In addition, it would be important to import those resources from allies and trading partners at a discount. The current housing situation motivates American politicians to get a handle on inflation that was at 3.4% which is contributing to the pressure and pain Americans are feeling. The next step would be to get mortgage rates down or lower housing prices. Building more houses will lower housing prices and remove pressure on buyers. The current housing crisis is an issue and seems to have gotten worse in some areas over the last year.
Bibliography
“New Residential Construction.” U.S. Census Bureau, https://www.census.gov/construction/nrc/current/index.html. Accessed 27 Oct. 2026.
“Rental Housing Finance Survey (RHFS).” HUD USER, U.S. Department of Housing and Urban Development, https://www.huduser.gov/portal/datasets/rhfs/home.html. Accessed 27 Oct. 2026.
“Rental Housing Finance Survey (RHFS).” U.S. Census Bureau, https://www.census.gov/data-tools/demo/rhfs/#/. Accessed 27 Oct. 2026.
“U.S. Home Price Growth Kept Climbing in August.” The Wall Street Journal, https://www.wsj.com/economy/housing/u-s-home-price-growth-kept-climbing-in-august-d3840176. Accessed 27 Oct. 2026.
“US Home Sales Rose in September, but Slowed from a Year Earlier as Mortgage Rates, Prices Rose.” The Washington Post, 13 Oct. 2026, https://www.washingtonpost.com/business/2026/10/13/homes-sales-mortgages-inflation-housing-market/84b9c4ec-c70f-11f1-aefb-abe4112d087e_story.html.
“[Article on Mortgage Rates and the Housing Market].” The New York Times, 2 Apr. 2026, https://www.nytimes.com/2026/04/02/business/mortgage-rates-housing-iran-war.html
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