How Rising Fuel Prices Are Threatening US Housing Supply
Summary
Rising fuel prices in the U.S., caused by recent events in the Middle East, are increasing costs for building affordable housing. This makes it harder to create new homes for low-income families who already face a shortage of affordable options.Key Facts
- U.S. gas prices have risen from around $3 to over $4 per gallon, with some states nearing $6 per gallon.
- Diesel fuel prices reached about $5.40 per gallon in late March, up over $2 from the previous year.
- There is currently a nationwide shortage of 7.2 million affordable rental homes for 11 million extremely low-income households.
- Higher fuel costs raise expenses for shipping, building materials, and running construction equipment.
- About 62% of home builders report increased material costs due to higher fuel prices.
- Energy costs account for roughly 4% of the expenses related to building homes.
- Developers face greater financial challenges building affordable housing because energy price hikes increase costs while profit margins remain low.
- U.S. Energy Secretary says gas prices may stay above $3 per gallon until next year.
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