The Real Deal New York

These are the main challenges to housing affordability in New York

Investor purchases are on the rise
October 26, 2018 09:30AM

(Credit: iStock)

A decade out from the financial crisis, housing affordability remains a thorny challenge in New York City.

More investor purchases, fewer young homeowners and the threat of foreclosures are just a few of the factors affecting the city’s housing market, according to the Center for NYC Neighborhoods’ October report.

In the post-crisis period, the number of homes purchased by investors annually has doubled, eating into the options available for prospective homeowners, the report said. A flip tax or a tax on secondary homes could help the situation, the Center said.

At the same time, there’s been a 34 percent decrease in homeowners who are 35 and under — in part due to a lack of affordable options. According to the report, the typical New York City family was able to afford only 15 percent of all homes sold in 2017.

Rising prices have also affected housing affordability nationwide. Earlier this year, U.S. home prices were the least affordable in a decade — with average wage earners needing to spend 31.2 percent of their income to buy a median-priced home.

Prices in metro areas like Seattle have skyrocketed. Meanwhile, borrowing is also getting more expensive as the Federal Reserve continues to hike interest rates. [CNYCN] — Meenal Vamburkar