2024 U.S. housing hotspots with greater upward mobility

By the numbers: In its annual Global Wealth Report 2024, financial services firm UBS reports that the U.S. is one of few markets in their sample where wealth growth has accelerated since 2010 compared with the decade before.

• Since they published their first report 15 years ago, wealth in the Americas has grown nearly 146%, second only to Asia-Pacific, which has grown the most by nearly 177%.
• Meanwhile, Europe, the Middle East, and Africa collectively lag far behind at just under 44%.
• Specifically, between 2010 and 2023, average wealth growth in the U.S. has spiked to nearly 6.3%, relative to 3.7% between 2000 and 2010.

Yes, but: Not all regions in the U.S. have fared as well or benefitted equally. That’s partially due to regional variations in upward mobility.?

• Upward mobility is?the ability of a person, group, or class to improve their socioeconomic status or social standing.
• It’s an intrinsic part of the American Dream, which in simple terms is the idea that you’ll fare better than your parents, and your children will fare better than you.

What they’re saying: According to a new analysis from the Census Bureau and Opportunity Insights, a research group at Harvard University, that dream can seem more plausible depending on where you live.

• In 38 of the 50 largest metro areas in the U.S., young adults born to low-income families in 1992 were doing worse financially than those born in 1978.
• Some bright spots include Austin, TX, Charlotte, NC, and Nashville, TN, where people born in 1992 earned more annually than those in 1978, signaling increasing upward mobility.
• Brownsville, TX, had the biggest increase across generations. Those born in 1992 made $33,500 at age 27, compared to $31,400 for those born in 1978 (up 6.7%; adjusted to 2023 dollars).
• Metro areas where opportunities seem to be dropping include Philadelphia, PA, San Diego, CA, and Washington, D.C.

Why it matters: Upward mobility is closely tied to housing access and affordability.

• High housing expenses can restrict access to quality neighborhoods with better schools and job opportunities, making it difficult for families to improve their economic status. Conversely, attainable housing can facilitate access to resources and networks that promote social and economic advancement.
• While there are many other factors that determine upward mobility, such as education, health, and public policy, these too are often intertwined with where you have the means and access to live.
• “Shelter is a fundamental need. But also, where you live determines so much—about whether or not you’ll go to a good school or go to college; about your health, since there’s so much local variation with things like air quality; even your wages,” says Jerusalem Demsas at The Atlantic.

What to watch: Housing costs and opportunities are driven primarily by available supply, relative to demand.

• The national housing shortage and its adverse effect on affordability is well-documented. So it’s no surprise that regions with greater upward mobility also boast greater construction of new housing stock. In fact, Austin, Charlotte, and Nashville are all among the top 5 large cities building most homes in 2024.
• “There’s this big game of musical chairs happening, where people are moving all around the country in search of the next cheap housing market. And eventually, it gets to the point where there’s nowhere you can run anymore,” says Conor Dougherty at The New York Times. “So we need a building boom, and some outside force is going to have to push the industry to build way more housing than it is currently capable of or even wants to. And that outside force is almost certainly going to be the public sector — state, local, and ultimately the federal governments.”

Zoom in: One of the consequences of the housing shortage is that homeownership costs in the U.S. continue to rise, further restricting access.

• Bankrate reports the average annual cost of owning and maintaining a typical single-family home, excluding mortgage payments, is now $18,000, or up 26% since the pandemic began. This includes property taxes, home insurance, energy costs, internet and cable bills, and maintenance, which are expenses often underestimated by homebuyers.

Reality check: Assuming typical market conditions, it now takes over 11 years for buying to become financially advantageous compared to renting, according to Roofstock’s recent research.

The bottom line:?With undersupply as the root cause behind the housing crisis, the U.S. needs to focus on building more homes, says Jerusalem Demsas at The Atlantic.

• “Americans are aware by now that the housing-affordability crisis is acute, but many don’t understand what’s causing it. All too often, explanations center around identifying a villain. But I think that the fact of the matter is that a housing shortage means that someone’s going to miss out on housing in the place where they need it. What we see over the last—since, like, 1970—is the ratio of jobs being created in the most productive parts of the country not match up to the homes that are being created. If you create a process that’s so onerous for people that they can’t actually get enough building done, the cost of that means there are higher housing costs.”

Go deeper: In “How the Cost of Housing Became So Crushing,” The New York Times reporters Conor Dougherty and Michael Barbaro discuss how the U.S. can tangibly address the root of the housing crisis by incentivizing construction of more new homes at mass scale.

• “The first one is reducing regulatory barriers, like zoning restrictions that say how many units can be on an acre or environmental rules that kind of stretch out the timeline for how long it takes to get building. There are design rules. There’s a million little rules for how you build, and you can either get rid of them or reduce them, and that makes building easier, faster, and less expensive.”
• "The second thing you could do is put money into it. The government could build the housing on its own in some cases, or it can just give subsidies in the form of tax breaks or even direct subsidies to developers, who typically then are asked to make the housing more affordable in some way.”

Learn how AMH is contributing solutions to the national housing undersupply challenge by building thousands of homes every year: