We Don't Have a Housing Shortage. We Have a Paycheck Shortage.

Optimist Economy

Kathryn Anne Edwards and Robin Rauzi

Public Policy, Economics, Government, Economy

4.9 • 829 Ratings

🗓️ 10 February 2026

⏱️ 46 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Recent polls show 54% now consider housing unaffordable and the cost of homeownership dominates Americans’ economic anxieties. The popular “abundance” narrative says there’s a housing shortage and suggests cutting zoning or environmental rules will let us build our way out of it. But we don’t have a simple net shortage of units—we have a deep mismatch between what gets built and what workers get paid. After 50 years of wage stagnation, the median mortgage payment is over $2,200 while median weekly earnings are $1,200. That’s a gap deregulation or more luxury condos won’t close. The solution isn’t to just build more. It’s also to pay people more.

END NOTES:

To be considered affordable (30% of income) the median mortgage of $2,259 would require weekly earnings of $1,737. But the median weekly wage for full-time workers is $1214.
Where is the Housing Shortage? Of the nation’s 381 metropolitan areas, only four experienced a housing shortage between 2000 and 2020. (Op-ed from the author in Barron’s here.)
The US Housing Crisis is Really About Low-Wage Jobs. Kathryn’s take from 2024 in Bloomberg Opinion.
Rate of U.S. homeownership has been climbing since bottoming out in 2016 (Federal Reserve Bank of St. Louis).
Mortgage Debt Service Payments as a Percent of Disposable Personal Income is about what it was in 2019 (Federal Reserve Bank of St. Louis).
Median Sales Price of Houses Sold for the United States shot up about $90,000 from 2019 to 2025 (Federal Reserve Bank of St. Louis).
Housing Affordability and Housing Demand (Federal Reserve Bank of San Francisco)

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Transcript

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0:00.0	I have once put on an economist wedding card, like, congratulations on your upcoming household formation.
0:05.0	Nice.
0:05.3	For your successful household formation?
0:08.7	I wish, like, clearly I would only give to an economist because everybody else would be like,
0:12.3	yeah, I hope.
0:12.9	This is not right.
0:19.9	Hello, and welcome to Optimist Economy.
0:21.6	I'm Catherine Ann Edwards Economist.
0:23.4	I'm Robin Rousey and I'm an editor.
0:25.6	On this show, we believe the U.S. economy can be better and we talk about how to get there, one problem and solution at a time.
0:36.7	Today on Optimist Economy, we're going to be talking about the housing market.
0:41.3	Housing.
0:42.1	And there's really a shortage of housing.
0:45.2	And if supplies the answer to all of our housing cost woes, and I'm going to say no, but you should listen anyway.
0:54.0	Do we have any announcements?
0:57.5	Give us money.
0:59.2	Oh, yes.
1:00.3	We do have an announcement.
1:01.3	Oh, wonderful.
1:02.6	Optimist economy relies on people like you donating to our show.
1:06.0	Over the hiatus, we got donations at the spiritual sponsor level from four people, including Sonia Gill,
1:11.7	and we want to thank her for her donation. You too could become an on-air named spiritual sponsor
	...

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