Declining Driving Habits Could Impact U.S. Housing Market, Says Report

Understanding the Changing Trends in the Housing Market

Jason Haber, co-founder of the American Real Estate Association, recently discussed the shift in American driving habits and its potential impact on the housing market. Despite a decline in driving, developers continue to build new homes in car-dependent areas, creating a significant disparity between consumer behavior and housing development.

Insights From Realtor.com on the Housing Market

Realtor.com’s analysis showed a 2.3% decline in vehicle miles traveled per capita since 2019. The data, obtained from the Federal Highway Administration, highlights how Americans are becoming less dependent on driving. However, most new housing continues to be constructed in areas that rely heavily on vehicular transportation.

Transit-Oriented Development as a Potential Solution

The report suggests transit-oriented development as an alternative. This type of development focuses on creating walkable communities around transit stations. Despite the potential benefits, housing supply near transit continues to lag. For example, urban areas with transit stations constructed significantly fewer housing units compared to regions without these stations.

Analysis from the Urban Institute

According to a comprehensive analysis from the Urban Institute, almost nine times as many housing units were built far from transit stations as compared to those near them over the past two decades. However, there’s a positive shift in this trend. The analysis shows that neighborhoods near stations that opened between 2000 and 2009 saw housing growth about eight percentage points higher than comparable neighborhoods without transit access.

The Current State of Housing Supply

Despite the improvement, the housing supply hasn’t kept pace with the population and housing demand. From 2000 to 2019, urban areas with transit stations added 2 million units, while areas without stations added 17.6 million units. This indicates that most of the new housing supply is still being built in car-dependent areas.