A new survey rating median income housing affordability in 2018 found that there is a direct correlation between housing unaffordability and overall cost of living for a "median standard of living."
Demographer Wendell Cox says that "the key to both housing affordability and an affordable standard of living is a competitive land market that makes it possible to produce housing at production costs, including competitive profit margins." Cox adds that soaring house prices significantly drive down discretionary income that could have otherwise been used on goods and services. NewGeography.com reports that higher prices also fuel demand for more low-income affordable housing, which are reliant on public subsidies.
Higher house prices have a disproportionate potential to reduce the standard of living by consuming funds that would otherwise be available to purchase other goods and services. Even more concerning, high house prices, and related high rents, increase relative poverty, as many lower income households may have to forego basic goods and services because of higher housing costs, and may even be forced to seek public housing subsidies.
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