ROB SCHMITZ, HOST:
Well, there is one thing that Republicans and Democrats can agree on. Voters are saying one thing pretty clearly - life is too expensive. And voters expect the Democrats swept into office at all levels to do something about it. The biggest item in most families' budget is housing. Could these elections make a difference there? NPR's Jennifer Ludden is here to sort through all this. Welcome, Jennifer.
JENNIFER LUDDEN, BYLINE: Hey, Rob.
SCHMITZ: So candidates all over the country campaigned on making housing more affordable, but this seems like a pretty big problem to tackle, right?
LUDDEN: It absolutely is. And, you know, everyone probably remembers this recent spike in housing prices during the COVID pandemic, the surge in buying when mortgage rates were super low. But the underlying problem goes back a lot further, really to the housing crash in 2008. For at least a decade after that, the U.S. just did not build enough housing to meet demand. That helped drive up both rents and home prices, and now there's just a real shortage of housing people can afford, especially, you know, low- and modern-income (ph) families, and building that up just takes years.
SCHMITZ: Yeah. So with the caveat then, what can lawmakers do to help with housing costs?
LUDDEN: Congress can only do so much. States and cities can do a lot more with zoning, other laws. But housing experts say the good news here is that tackling housing is very bipartisan. I spoke with Andy Winkler at the Bipartisan Policy Center who points out that earlier this year, Congress did pass a sweeping housing package, and it has an array of dozens of items that altogether aim to boost supply and ease costs over time. But...
ANDY WINKLER: All the cool things that got put into that bill had money attached to it. So it is up to the next Congress to make sure that those programs, if we want them to be impactful for cities and states - to actually provide the money attached to them that they need.
LUDDEN: Winkler also says, in cities and states, there has been an uptick in recent years of lawmakers loosening zoning and land use rules to create smaller, cheaper housing. And he's optimistic there will be more of that. He says these elections just amp up pressure to act.
SCHMITZ: OK, so we're stuck with the housing market that we have...
LUDDEN: Yes.
SCHMITZ: ...For a bit. So let's shift to that. You know, this week, you reported on new data about how hard it is to buy a first home these days. So what's it like out there?
LUDDEN: It is rough. You know, there is a - kind of a national housing slump right now. You see some prices really softening in some areas, but they're still much more expensive than they used to be.
SCHMITZ: Right.
LUDDEN: And the share of first-time buyers remains a near record low, just 22% in the past year, about half of what it used to be. That's according to the National Association of Realtors, which profiles buyers every year. And get this. They also find a record-high share of first-time buyers - 1 in 10 - paid all cash...
SCHMITZ: Oh.
LUDDEN: ...Which is a big change. One real estate agent told me he'd never seen that for the first 15 years in the field, but it has become more common as the market's grown so competitive.
SCHMITZ: All cash - so where...
LUDDEN: Yes (laughter).
SCHMITZ: ...Are people getting this cash? Are they going to Vegas, or they get that...
LUDDEN: Right.
SCHMITZ: ...From their parents? Where are they getting it?
LUDDEN: Parents is a good guess. That's part...
SCHMITZ: OK.
LUDDEN: ...Of the answer, for sure. NAR finds actually a sizable chunk of these all-cash, first-time buyers are using money they've inherited. And that is a trend expected to grow because boomers are now entering their 80s.
I spoke with Jessica Lautz, chief - deputy chief economist at the Realtors Association, and she says, though, this generational wealth is really happening, the younger buyers, would-be buyers - the median age of these who paid all cash for the first time - they were 54, so they waited a long time for that generational wealth. And the first-time buyers overall are older than they used to be. Lautz says that just gives people more time to save up.
JESSICA LAUTZ: So we're seeing a wealthier first-time homebuyer overall, someone who has a 401(k) or can tap that 401(k) or has stocks or even cryptocurrency to allow them into homeownership.
LUDDEN: So that, of course, makes it even harder to break into the market these days if you don't have family money or a big stock portfolio.
SCHMITZ: That sounds pretty depressing.
LUDDEN: For young people trying to break in, it can sound depressing, absolutely.
SCHMITZ: Yeah.
LUDDEN: I should add, though, that every generation is feeling this housing squeeze. You know, there are also empty nesters sitting in a lot more house than they need.
SCHMITZ: Right.
LUDDEN: But between the high prices and the high mortgage rates, they can't afford to downsize, and that has a whole ripple effect in the market. But, you know, to go back to where we started, the fact that housing afford - I mean, housing is such a local issue in every community, right?
SCHMITZ: Right.
LUDDEN: But that is now a national issue. You have politicians at all levels just talking about this. That's a good thing, but the solutions do take time.
SCHMITZ: That is NPR's Jennifer Ludden. Thanks so much.
LUDDEN: Thank you.
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