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Realtor.com launched the latest chapter of its eight-month buyer agency campaign on Tuesday with a passionate open letter from CEO Damian Eales. In the letter, Eales urged local, state and federal legislators to use their upcoming terms to meaningfully address housing affordability — or risk the collapse of a major pillar of the American Dream.
Damian Eales | Credit: Realtor.com
“The average single-family home in America costs $420,000. If home prices had simply kept pace with inflation since 1963, that home would cost just $185,000,” read the letter, which is on Realtor.com and The Wall Street Journal. “Regulations and other costs buyers bear add more than $90,000 to the price of a new home. And supply is not meeting nationwide demand. America must build as many as 7.2 million new homes just to meet that demand, and the vast majority of them must be priced below $400,000.”
Eales said buyer-broker commissions have taken center stage in the conversation about housing affordability, as some industry experts and analysts predict the downfall of cooperative compensation could lead to a double-digit decline in commission trends. Even if that prediction comes to fruition, Eales said it doesn’t address the main factors contributing to weakening affordability, such as cumbersome zoning laws and inadequate housing starts.
“As a community, we need to address the issue head-on, in a way that does not compromise consumer protections like the ability for buyers to have their own agents,” he said. “If policymakers want to improve housing affordability, they must start by focusing on solutions that increase the housing supply.”
“Doing that means taking steps to ease restrictions on buildable land, cutting red tape, and providing incentives such as tax credits to help builders build more homes faster than ever,” he added.
Housing policies are getting more attention this November compared to past election cycles, with both presidential candidates placing a priority on solving affordability issues.
Vice President Kamala Harris’ housing plan includes $25,000 in down-payment assistance for first-generation homebuyers, a $10,000 tax credit for middle-income homeowners, a closing cost waiver on refinanced mortgage loans, and more than $258 billion toward affordable housing projects and initiatives.
Meanwhile, former president Donald Trump’s housing policy focuses on cutting building regulations, lowering energy costs and limiting undocumented immigrants’ housing rights, as he blames them for the country’s housing shortage.
On the state level, California and Arizona have made national headlines for two controversial propositions on rent control and cracking down on tent cities. Non-profit news organization Shelterforce said there are more than three dozen housing measures on state and local ballots in Arizona, California, Colorado, Florida, Georgia, Louisiana, Maine, Maryland, New Jersey, New Mexico, North Carolina, North Dakota, Rhode Island and Wyoming.
A Redfin survey on Monday revealed housing affordability influenced more than a third of early voters’ votes, with Harris voters more likely (43 percent) than Trump voters (29 percent) to say their chosen candidate’s housing policies impacted their vote.
“It has become much more difficult to afford to buy or rent a home since the pandemic-driven moving boom, which drove up housing costs,” Redfin’s report read. “… While voters who have already cast their ballot were more likely to cite issues other than housing affordability, it’s still an important factor for many voters.”
Eales said Realtor.com is dedicated to working with key stakeholders to create “pragmatic solutions” for “buyers who are price-locked out of the market.”
“Realtor.com will work with our communities, economists, business leaders, leaders of housing and building associations, and, of course, leaders of government, to highlight the housing supply shortages we have in every state, as well as pragmatic solutions to solve this problem,” he wrote.
“On behalf of those buyers who are price-locked out of the market, the real estate professionals who support them, and the homebuilders building more affordable homes, help us restore homeownership for all.”
“At Realtor.com, we’re for real solutions,” he added. “We hope that you’ll be part of them.”
