It’s nearly impossible these days to build a single-family home in metro Phoenix for under $400,000.
And that’s a problem, considering that the average resident doesn’t make enough to afford a $400,000 home.
If this is the new normal — and every homebuilder and housing affordability researcher I spoke with says it could be — that has major implications.
Not only for future economic growth, but also for the longstanding image that metro Phoenix has presented to the world.
As recently as 2020, two-thirds of metro Phoenix homes sold were considered affordable for the average resident (meaning, the mortgage was less than 30% of their income).
Now, less than a third fit that definition, placing us among the least affordable major cities in the nation for housing.
But the factors driving up costs began to emerge as far back as the Great Recession, as the pace of home construction slowed; neighbors increasingly fought denser, more affordable projects; and speculators scooped up many available homes with cash.
For years, we weren’t adding enough homes to keep pace with population growth.
The pandemic only amplified these problems. Supply chains were interrupted. The price of building materials went through the roof.
Then inflation set in. And while the cost........