It was promising to see legislators fulfill their commitment to prioritize homeownership with the bipartisan enactment of the 21st Century ROAD to Housing Act earlier this year. However, over two months later, it’s evident that the ongoing home affordability crisis extends beyond simply increasing housing stock, and initial macroeconomic adjustments won’t suffice to stave off a significant opportunity crisis within the housing market.
In recent months, traditional housing inventory has risen, yet the median price of existing homes has also climbed for the 38th month in a row on a year-over-year basis. Sales of existing homes dropped another 2% in August to an annualized rate of 3.98 million, with pending sales remaining 4.7% lower than last year’s figures.
The new legislation serves as a foundation, not a comprehensive solution. Americans continue to face a housing market marked by historically low sales activity, high borrowing costs, and persistently elevated home prices. Addressing these issues necessitates a focus beyond merely constructing more homes and tweaking macroeconomic factors, to the fundamental issues that dictate whether consumers can access the available housing opportunities.
For millions of Americans, homeownership now seems unattainable, with the median age of first-time homebuyers in the U.S. reaching an all-time high of 40. Escalating mortgage rates, climbing construction costs, ongoing inflation, and economic uncertainty have combined to create one of the most challenging housing landscapes in recent history. While these circumstances may seem daunting, they also present a significant opportunity. This critical juncture requires structural intervention to restore the housing accessibility that American families deserve.
While lawmakers deserve recognition for the passage of the 21st Century ROAD to Housing Act, their efforts must continue to restore affordability in the housing market. As economists monitor interest rates and advocacy groups campaign for local zoning reforms, a critical structural transformation is unfolding unnoticed by policymakers and largely overlooked by the public. This quiet struggle involves issues of data, transparency, and market access.
The Emergence of Closed Ecosystems
For years, regulators have examined transparency and competition in various fields, including finance, social media, and healthcare. Yet, remarkably little scrutiny has been paid to transparency in the housing market, even though homeownership remains the primary means of wealth accumulation for many American families.
Currently, the residential real estate market is experiencing a troubling trend toward fragmentation, decreased visibility, and closed listing ecosystems. A once transparent marketplace is now fracturing into private networks. Recently, we witnessed the temporary vanishing of thousands of listings in the Chicago area from public view, with the risk of more to come; a controversy regarding a major real estate firm’s private-listing strategy; and regulatory scrutiny that raises broader concerns about transparency and competition. This situation has prompted several states to consider legislation aimed at regulating private listings.
Moreover, a report from the Consumer Policy Center highlighted increased double-ended transactions among specific brokerage models, reinvigorating concerns that diminished competition and self-serving practices could hinder consumers from benefiting from the openness and competition crucial for a healthy housing market.
This structural transition restricts consumers’ ability to access the entirety of homes available in the market, creating a false perception of limited supply. Consequently, it complicates the identification of newly available homes and narrows access to those properties for a smaller subset of individuals, ultimately driving home prices higher.
This transformation is occurring at a time when Americans require a more open, competitive, and consumer-centric housing market. It is vital for the administration to prioritize the interests of all Americans by advocating for open-market principles within the housing sector.
The Unintended Effects of PropTech
While innovative data and technology have enhanced many aspects of the homebuying process, they can also introduce significant unintended consequences that adversely affect consumers. Measures must be implemented to safeguard Americans from being restricted in their access to housing opportunities.
Though the government shouldn’t oversee every sector, it is essential to acknowledge that if housing becomes overly restrictive and unaffordability worsens, it could have broader detrimental effects on the entire economy. Homeownership has long been a vital indicator of the American dream and is one of the most potent avenues for generating generational wealth and achieving sustainable financial security in the U.S.
As policymakers deliberate on the future of digital marketplaces and competition across various industries, housing transparency warrants equal consideration, given that homeownership is a key driver of middle-class wealth in America.
Safeguarding the Marketplace
We cannot afford to postpone addressing these structural issues. Lawmakers must confront the trend toward limiting transparency and access. Historically, it has been the U.S. government’s responsibility to ensure that the economic ladder remains open and reachable for all.
To prevent the current housing downturn from becoming a permanent economic barrier, leaders must prioritize the structural integrity of the market itself. A thriving real estate market relies on buyers and sellers engaging in a fully transparent environment where information is treated as a public utility, rather than concealed behind corporate gatekeepers or fragmented digital barriers.
If our leaders aspire to restore belief in the American dream of homeownership, they must prioritize policies that foster openness, transparency, and consumer access. This is not merely sound housing policy; it is essential to ensure that a temporary housing crisis does not evolve into a lasting crisis of the American spirit.
Stuart Siegel is the President and CEO of Engel & Völkers Americas.
This column does not necessarily reflect the views of HousingWire’s editorial team and its affiliates.
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