No. 3 – March 16, 2022

 

Hi First name / there, 

 

In the spring of 2020, my partner Geoff and I shared a 500-ish square foot apartment with Olive, our Pomeranian. For a couple of weeks, it seemed fine that we both spent our workdays at the kitchen table. But after a while, well, you probably see where this is going. 

 

We decided to buy our first home together, and after a few discouraging weeks of browsing condos that were within our budget, I started to feel existential dread. There just aren’t enough homes, I lamented. We’re going to miss our opportunity to start accruing wealth, I worried. We eventually closed on a condo full of compromises in July 2020, but hey, at least our payments weren’t going to a landlord anymore. 

 

I’ve received a few asks for our first-time homebuyer journey, which I’d love to share in more detail in a later newsletter. But I wanted to start out today’s newsletter by explaining the emotions and fears I experienced because I’m not alone. A lot of people rushed to buy homes during the pandemic, and while their reasons may have differed, all of that demand outpaced the current supply. A lot of folks were left reeling with buyer’s remorse, and a lot of folks walked away from the purchase process altogether. 

 

And of course, there are millions of Americans who couldn’t afford or didn’t want to enter the buying market at all. If I’m being honest, I’m still learning to parse out the different factors at play between rental and home purchase markets and how those factors impact how much we pay to put roofs over our heads. 

I mentioned this last week, but I think it’s worth restating; according to Freddie Mac, the U.S. is about 3.8 million homes short of where it should be to keep pace with demand and maintain a relatively balanced buyer-seller market. So why the heck is that?

via @homeownermemes on Instagram

First, it’s really expensive to build. The National Association of Home Builders claims that supply chain disruptions – from labor shortages to lumber costs to kitchen appliance delays – are partly to blame. They also warn that rising interest rates will exacerbate the problem. One thing I always have in the back of my mind when I read things like this is that industry has its own interests to look out for. We can’t always take what they say at face value, because they obviously have a stake in the game. But I think in a general sense, it is more expensive to build now than it used to be. 

 

There are some cool companies out there that are trying to address this challenge with modular home construction, which we will absolutely explore more later. Another factor at play here is that there just aren’t enough people who know how to build homes. All of these (plus zoning! And land values!) mean there just aren’t as many “starter homes” for people looking to enter the market for the first time. 

 

So no, there aren’t enough homes. Unless there are? Next week, we’ll look at some analysis that says the opposite of pretty much everything in today’s newsletter.

 

See ya next week,

Dominique

 

P.S. – Each of these newsletters gets posted like a blog post on the member dashboard. That means you can leave comments! We can talk to each other there! My favorite part of learning is the back-and-forth exchange of ideas, and the comments section could be a cool place to start. Maybe in the future, we can host article/podcast club discussions? Lmk if this is something that sounds fun! 🤗 

 

Join us! Our first Design Office Hours is next week! If you have a quick design question that you’d like to run by me (or if you just want to say hi!), be sure to sign up before all spaces are filled.

Currently reading: The Whiteness of Wealth by Dorothy A. Brown. This book is incredible – a tax attorney and professor breaks down the ways that our tax system continues to disadvantage people of color in America. I’m listening to the audiobook version on my drives to and from school, and it’s very well narrated. The other day I proclaimed to Geoff “Maybe I’ll become a tax attorney!” 😂 It’s that good.