The writer, an economist, is chairman and CEO of Sage Policy Group Inc. in Baltimore. He also serves as the chief economist to Associated Builders and Contractors and as chief economic advisor for the Construction Financial Management Association.
By now, all are aware of the ravaging impacts of inflation. Many are also aware that housing costs have played a large role in rapidly driving up the cost of living.
Since the start of the pandemic, the U.S. Consumer Price Index has expanded nearly 16% in a nation that aspires to 2% inflation per annum. The median price of a home in Prince George’s County has also raced higher, from $316,500 in February 2020 to $415,000 more recently, an increase exceeding 31%.
The underlying economics are straightforward. Our households do not have enough access to high quality housing that is affordable, and many emerging households seek to achieve an American dream of homeownership but have been frustrated by a combination of incredibly low inventory and lofty prices. In March 2023, there were only 798 active listings countywide. Four years earlier, listings stood at more than 1,600.
With supply low and prices high, many families have remained involuntary renters. Recent data indicate that the homeownership rate in Prince George’s County has been in the range of 62%, meaningfully below the national average of 66% and the corresponding 65% rate in neighboring Montgomery County.