Even as the stock market reached all-time highs, the number of homeless Americans—653,000—has reached historic levels in the United States

Due to the financial strain caused by rising rents in recent years, an increasing number of Americans are becoming homeless.

A research released on January 25 by Harvard’s Joint Centre for Housing Studies estimates that 653,000 individuals reported being homeless in January 2023, an increase of around 12% from the same month the previous year and 48% from 2015. According to Harvard academics, that is the biggest one-year growth in the nation’s homeless population ever.

Long a concern in states like California and Washington, homelessness has also surged in previously more affordable areas of the United States. The states with the biggest increases in the number of homeless people are Arizona, Ohio, Tennessee, and Texas as a result of growing local housing expenses.

Alarming increases in the number of people who struggle to pay for housing occurred in 2021 and 2022, at a time when rising rental costs nationwide exceeded increases in worker wages. The researchers discovered that while a number of causes might lead to homelessness, the increase in housing insecurity last year was largely caused by high rents and the expiration of pandemic assistance.

“Renter safeguards, income supports, and housing assistance helped halt a significant increase in homelessness in the early years of the pandemic. But many of these protections came to an end in 2022, just as rents were skyrocketing and a growing number of immigrants were being denied employment. As a result, in just one year, the number of homeless persons increased by around 71,000” according to the reports.

For some time now, many have been raising the alarm about the crisis. In late 2023, Forbes reported that the supply of homes had reached an all-time low. Only 910,100 homes were available for purchase, a 14.2% decrease in housing supply over the previous year, according to the survey. Chief Economist Lawrence Yun of the National Association of Realtors (NAR) stated that he anticipates it would take years for the problem to be resolved, so those wishing to purchase a home should prepare for a lengthy process.

Investors are still purchasing homes in spite of growing rates. Typically investors, all-cash buyers rose to 23% in December from 19% the previous year. The housing market is still under significant hardship as a result of this.

Even while this is a significant concern, the scarcity of fresh supply is getting worse. Hundreds of pages of laws, pertaining specifically to new American homes, frequently cause delays and significant cost increases for projects. This is particularly true for businesses trying to address this issue by producing dwellings in large quantities.

The modular home manufacturer Veev, which collected $600 million to address the housing issue, declared its intention to close its doors at the end of 2023. Another modular home firm, Boxabl Inc., has had difficulties with state regulators. Boxabl is building factories to produce houses similarly to how manufacturers produce cars: a brand-new home is produced every few minutes, assembled in a factory, and delivered to your home in a matter of seconds. Co-founder of Boxabl Galiano Tiramani frequently draws attention to the challenges that come with a product such as Boxabl. Specifically, it’s not as simple as it might seem to design a single house that works for every state because every state has a complicated housing code.

“We must employ a third-party inspector to certify our manufacturing and product in accordance with the state’s modular home regulations. It appears that in order to certify a single product and assembly line, we must perform these inspections forty times for each of the forty states’, Tiramani wrote on X.

Tiramani made appeals in other posts to state regulators who would be in favour of working with Boxabl to alleviate the housing problem in their own jurisdictions.

“Homelessness is at the highest rate it has ever been in the USA with increasing migrant populations that now exceed the birth rate,” Tiramani stated to Benzinga.

The Joint Centre for Housing Studies found that those with annual incomes between $45,000 and $74,999 were most negatively impacted by rising rent, paying 41% of their take-home pay for housing and utilities on average.

The U.S. Department of Housing and Urban Development advises tenants to pay no more than thirty percent of their income for rent.

The typical rent in the United States was $1,964 in December 2023, up 23% from before the epidemic, according to online housing marketplace Rent, despite evidence that the rental market is cooling. In contrast, government data indicates that the median worker’s inflation-adjusted weekly earnings increased by 1.7% between 2019 and 2023.

“Rapidly rising rents, combined with wage losses in the early stages of the pandemic, have underscored the inadequacy of the existing housing safety net, especially in times of crisis,” according to the Harvard study.

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