Middle-income homebuyers in the United States face a formidable challenge in the current real estate landscape. Despite qualifying for and being able to afford mortgages, these prospective buyers have limited options. According to a recent analysis by the National Association of Realtors and Realtor.com, the middle-income bracket is grappling with the most severe housing shortage, with over 300,000 affordable homes missing from the market. In stark contrast to five years ago, when this group could afford half of the available homes, they now find themselves able to purchase only 23% of the listings.
As of April 2023, the market had approximately 1.1 million homes for sale, reflecting a 5% increase from the previous year. However, a mere fraction of these homes are accessible to middle-income buyers. This predicament has led to the emergence of what is now known as the Middle Market Dilemma or “missing middle housing.”
What is Middle Market Housing?
The term “Missing Middle Housing” refers to a range of multi-unit or clustered housing types designed to be comparable in scale with single-family homes. These housing options address the growing demand for walkable urban living to accommodate shifting household demographics and provide buyers with housing choices at various price points. Typically ranging from four to eight units per building or per lot, with some allowing up to 19 units at the upper end, missing middle housing types include small multi-unit apartment buildings, townhouses, duplexes, triplexes, or fourplex houses.
These housing types earned the label “missing” because, despite historically playing a crucial role in providing housing choices and affordable options, they are currently underrepresented in construction projects. The decline in building these units over the past three to four decades has led to a scarcity in the market.
Affordability by Design
Missing Middle Housing distinguishes itself by being constructed specifically to provide affordable housing. Achieving affordable price points for both rental and for-sale units without the need for subsidies, it addresses this through several key features:
- Increased Supply: By boosting the supply of housing options, missing middle housing contributes to meeting the demand.
- Efficient Land Use: Simple, lower-cost construction methods and the efficient use of land with shared and smaller units make these housing types economically viable.
- Reduced Automobile Reliance: The design encourages reduced reliance on automobile ownership by being built in urban areas, contributing to a more sustainable and cost-effective lifestyle.
- Neighborhood Living: By promoting community living, these housing types create a sense of neighborhood, enhancing the overall quality of life.
- Income Opportunities: The diversity in housing options creates more income opportunities for residents, making the end product more attainable for middle-income households.
Investment Opportunity with Cornerstone Commercial Investments
Recognizing the increasing demand and limited supply of middle-market housing, Cornerstone Commercial Investments identifies a lucrative investment opportunity. With strategically curated investments in hot real estate markets where a significant population shift is occurring, we have focused on creating middle-market housing options.
Understanding the potential for substantial returns, Cornerstone Commercial Investments invites investors to capitalize on this opportunity. For more information on how to join this venture, we encourage you to contact us or visit the website at Cornerstone Commercial Investments today. In the evolving landscape of real estate, seizing the Middle Market opportunity can be both financially rewarding and socially impactful.