I bought my first home 34 years ago, a three-bedroom, two-bath house with a carport and large fenced backyard. My then-wife and I were expecting our second child, Abby, at the time. We paid $50,000 for the house, just a little more than the average price at the time.

One of the big motivators was a sweet rate on a mortgage loan: 8.75%. It seems crazy to think of that as a good rate, especially compared to the last decade, when the average mortgage rate ranged from a near-record low of 3.65% in 2016 to the current 6.43%.

With a 10% down payment of $5,000, our monthly payment was $500. Combined with groceries, we spent about 40% of our income on food and shelter.

There were other financial components that influenced our decision to buy a home. I had just been promoted at work, which lifted my wages to $36,000 per year. My wife, who worked at a bank, made $17,000 per year, which gave us a household income well above the median household income in Mississippi of $31,000.

I was 34-years-old when we bought that first home.

All this to say I was pretty typical of a first-time homebuyer in 1992.

Things have changed… dramatically.

It is much more difficult to buy that first home now than it was back then.

The above-average $50,000 home in 1992 costs $250,000 today, a big number for a couple with today’s median household income of $70,000. A 10% down payment today would be $25,000, which is also a big number for folks just starting out.

Although that modern family would take home $1,100 more than in ‘92, their combined cost for housing and food would consume 55% of their monthly income.

They would have $1,850 left over each month for everything else, $70 less than the ‘92 couple. In 1992, their $1,920 leftover income would be the equivalent of $4,450 today.

The housing crisis has a ripple effect on the entire economy.

Housing is an essential cost. People must pay rent or mortgages before anything else. When housing costs spike, it leaves households with significantly less disposable income. This “crowds out” spending on other sectors of the economy, such as retail and consumer goods, dining and entertainment, travel and leisure. In fact, consumer spending drives roughly 70% of GDP.

The crisis is exacerbated by investors, who now account for nearly a third of single-family home sales, which they flip for a tidy profit, driving up prices along the way. If you want to see an example of this, consider Oxford, where home prices have soared by 320% since 2000, thanks largely to investor purchases.

Investors compete directly for starter homes, often using all-cash offers to bypass high interest rates. This leaves traditional buyers, especially those using traditional loans, unable to compete.

The crisis harms us in other ways, too.

Homeownership ties people to their communities. Owners have a stake in their neighborhoods, leading to higher civic pride, stability, and better schools. When homeownership remains out of reach, these community benefits erode. We’ve seen plenty of evidence in our own backyard.

In response to the crisis, Congress recently passed the bipartisan 21st Century ROAD to Housing Act. This legislation contains more than 50 provisions designed to slash red tape, boost the supply of starter homes and restrict corporate buyers.

While it won’t solve every issue (inflation, stagnant wages), it represents a common-sense approach to a structural problem.

It is a rare moment of effective congressional action on a crisis affecting millions of families.

Barring a Trump veto, the act goes into effect Friday.

Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].

Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].

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