7 statistics that illuminate the housing crisis
Headwaters Economics shines a light on record-breaking costs in the West.
Housing is getting more and more expensive in the West, and not just in the region's resort towns and booming tech hubs. A new report from Headwaters Economics, a community development think tank, digs into recent trends on record-breaking housing costs. “What was very apparent to us is that these unprecedented price increases that we’ve been seeing lots of anecdotes about aren’t isolated,” said Headwaters Economics researcher Megan Lawson. “It’s incredibly widespread. It’s not just limited to the Bozemans and the Boises. It’s ubiquitous.”
Nationwide, 607 counties saw a record rise in housing costs between 2020 and 2021, 134 of them in the West. Why is the West affected? Lawson ticked off a few hypotheses: Local housing stock is expensive relative to local wages, but it’s generally affordable to people from bigger metropolitan areas. At the same time, the pandemic is driving migration to areas with amenities and a high quality of life. It’s created a perfect storm of growing demand — and that drives up prices.
And with the “area of unaffordability” expanding, Lawson said, she thinks the region will see even more displacement. It used to be that if you worked in Durango, Colorado, you might have to drive 30 minutes to get to a house you could afford. If you had a job in Jackson, Wyoming, you might commute over a mountain pass to Idaho, or down a river canyon, to get home. Now, the old coping strategies are becoming less feasible. “Even those further outlying places are more expensive than they were a year ago,” Lawson said.
The rise in housing prices since 2020 has affected renters more than homeowners, especially in places that were already unaffordable, according to another new report from Headwaters. Of the 607 counties that experienced record increases in housing costs, 92% were already unaffordable for renters, compared to just 18% for homeowners. In the West, 87% of the counties experiencing a maximum price increase during the pandemic were already rent-burdened. A home is often the best way for a family to accumulate wealth, and if first-time buyers delay or don’t purchase at all, that will have generational consequences. “I’m very concerned that’s going to dramatically exacerbate the income inequalities we already see,” Lawson said.
A combination of incentives for developers and regulations that promote affordable housing would help tackle the problem, Lawson said. Policy tools like density bonuses and inclusionary zoning can help increase housing stock and fund affordable housing, and community land trusts can help preserve affordability. “But no place is doing enough” right now, Lawson said.
Below, a few eye-popping numbers from Headwaters’ analysis:
45
Percent of Americans who live in places that saw unprecedented housing price increases in 2021 — about 144 million people altogether.
54
Percent increase in home value between 2020 and 2021 in Polebridge, Montana, the greatest increase in the West. This is likely due in part to a small number of homes, but several more populous places, including California’s San Bernardino, Humboldt and Sonoma counties, round out the list of the top 20 in the West. The town of Eagle, Idaho, ninth in percent change, saw the biggest dollar increase in home value: $229,125.
12
Number of ZIP codes that, out of the 20 Western ZIP codes with the biggest increases, correspond to just two counties: Ada and Canyon in Idaho, in the Boise area.
9,516
Number of ZIP codes that experienced their highest-ever home-value increases in 2021; 21% of them are in the Western U.S. (There are 41,692 zip codes in the country.)
4,186
Number of ZIP codes where the value of a typical home rose by $50,000 or more; 57% of them are in the Western U.S.
8
Number of states where more than half of the ZIP codes experienced their most rapid price increases ever: Colorado, Connecticut, Idaho, Massachusetts, New Hampshire, Oregon, Utah, and Washington.
5
Number of those states in the West: Colorado, Idaho, Oregon, Utah and Washington.
Kylie Mohr is an editorial intern for High Country News writing from Montana. We welcome reader letters. Email her at [email protected] or submit a letter to the editor. See our letters to the editor policy.