Atlanta, we have a problem. Housing is becoming too expensive in this region. This is particularly true in the homeownership market. Although with rents rising so quickly in metro Atlanta, those priced out of homeownership aren’t finding relief in renting, making it that much harder to save for homeownership in the future. But for this post, let’s keep it simple and focused on homeownership.

The chart below illustrates the basic problem. While the region has seen an increase of 135,315 homeowners since 2012, this net gain is driven entirely by households making over $75,000 annually. In fact, the region saw an overall decline of about 60,000 owner households in lower income brackets.

Source: U.S. Census Bureau, American Community Survey 1-year Estimates

One of the primary reasons for this disparity is the skyrocketing cost of housing over the past decade. We document some of these reasons in our latest Regional Snapshot, but it boils down to a simple matter of supply and demand. Inventory of for-sale homes is at all-time lows, the average sales price is higher than the average list price, and homes are flying off the market in mere days. (Here is a simple visualization of these trends, using data from Redfin, a national real estate brokerage that has lots of cool housing market data.) Add to these factors the fact that construction costs have soared over the past few years — going into turbo mode after the first few months of the pandemic — and, well, the result is ever-increasing home prices that are pricing low- and moderate-income families out of homeownership.

Homeownership is one of the primary tools we have at our disposal to ensure intergenerational transfer of wealth, thus it is becoming increasingly harder for a wide array of families to employ that tool. Needless to say (although I will say it anyway), homeownership has long been linked with the so-called “American Dream,” but recently that dream is only for those with means while everyone else is left to continue to dream.

Yep, that is a problem.