(screen whooshing) - We're seeing a lot less young people be able to buy their first time, buy their home for the first time.

In fact, the average age of a first-time home buyer has increased to 40 years old.

It has really increased in our state.

So that shortage is impacting both rural and urban communities, just a little bit differently.

- [Stefanie] Not only is owning a home in Michigan more expensive than ever, finding a safe and affordable place to live is also very difficult and costly.

- The average family can only afford about $173,000 for a home.

It's really hard to find a home in our state that only costs 173,000.

- [Stefanie] And when it comes to new construction, the prices are even more staggering.

- The average cost to build a new home is close to 400,000 now, right?

So that's a big gap between that 173 and 400, but there's also a big gap between the average cost of a home, which is in the 200s, versus what the average Michigan family can afford, right?

And those are homes that are like 1,000 to 1,200 square feet.

Some are on a slab, right?

They don't even include a basement.

So we're not talking really large homes.

We're just talking your average three-bedroom starter home.

- [Stefanie] Now, Michigan isn't the only state dealing with a housing shortage.

It's a nationwide problem.

Amy Hovey with MSHDA tells us it's a problem nearly two decades in the making.

- It started in 2008 when we went through our recession.

Building permits plummeted, and it took a long time in our state for those to be able to creep back up to normal building rates.

Pandemic only exacerbated where we were with housing in our state.

The cost of construction went up.

We've had a labor shortage since the recession.

We also saw more people purchase second homes in our state during the pandemic.

We saw an increase in Airbnbs, short-term rentals in our state, and not just on the coastline where you would typically think we have a lot of Airbnbs, but they're pretty pervasive throughout the entire state.

Michigan is a state that population is aging.

They're not moving out of their homes as they age.

So our household size are shrinking.

So where we might have had four or five people living in a single home, that same home may now have just one or two people.

- [Stefanie] And as the number of available homes began to shrink, rents went up.

- So supply and demand.

As supply was stagnant but demand soared, landlords knew they could ask for more money and get it.

And that's what happened.

In some of our communities, you saw up to 25, 30% increase in rents within just a few years.

And when you think about that, Michigan families, their largest payment in their budget is housing, whether it's a mortgage or their rent.

Most of us couldn't see that go up 30% in a single year and be able to stay in that home, right, or in that housing unit.

- [Stefanie] Leaders with Habitat for Humanity in Cadillac see the need firsthand.

They've stepped up efforts to help deal with the crisis.

They used to build one house a year, but now, they build three.

They also started a repair program to help keep people in their homes safely and affordably.

But there's only so much they can do.

- So in the Wexford County, there was a research study done.

It wasn't all the counties, but that research study showed that in the next five years, we're gonna be 4,000 houses short for rent and for sale.

That's a lot for a town of 10,000 people.

I mean, we need housing everywhere, and I feel like, until we can get some apartment complexes and multifamily housing units and townhouses and those kinda things, we're gonna still struggle with that.

- [Stefanie] Families who are selected to live in a Habitat home must meet certain requirements.

They also go through extensive training, like finance and budgeting.

- They have to have a job.

They have to have a decent credit score.

And they have to have a debt-to-income ratio that makes it work.

So we don't want 'em to fail.

We want people to be able to stay in those houses affordably.

And they have to put in sweat equity.

They have to have a job, you know, two-year job history.

They do have to qualify for a mortgage.

We don't give houses away.

They do have a mortgage.

- [Stefanie] After years of renting and seeing her payments go up, Juanita Custer qualified and moved into a home through Habitat for Humanity in Isabella County last year.

With her monthly mortgage, she now pays less than when she was renting.

- I think when you're renting, you kinda feel like you're throwing your money away.

You're not getting equity.

You can't update the porch, paint, throw a new light fixture up.

So when you're home, you get the rewards.

And I think it just makes you feel good about yourself, the home ownership program.

And once you get out of renting, you really, that's when you start to notice the issue.

- [Stefanie] Solving the housing shortage is complex.

In 2022, leaders created a statewide housing plan to understand different needs for different people and populations.

They're also working to create more regional housing partnerships, provide additional financial assistance, along with encouraging local governmental policy changes.

- And so that's the overlying biggest barrier is the private market is just not working on its own, which really requires the government to get involved.

And it can get involved in lots of ways.

So it can change the zoning and the housing policies in those individual municipalities.

We have a Get Housing Ready guide on our website that really speaks to local governments and says, "This is what you can do as a local government to kinda be pro-housing, to be able to be more attractive to developers."

That might include allowing for a denser housing type, right, more housing units on less land, which does bring down the cost of creating housing.

It might also be allowing for ADUs, for those smaller housing units on an existing lot, right, whether it's above a garage, whether it's a backyard housing unit, you know?

Those adjacent dwelling units really do help us address the housing shortage.

- [Stefanie] The state is also incentivizing apprenticeship programs to boost their labor shortage in construction trades.

It's a path that not only pays well but teaches skills that go beyond the classroom.

(saw whirring) - It's awesome, 'cause I'm teaching a little bit of everything about the house, especially if they have me two years.

You know, you get the framing, the siding, the roofing, electrical, plumbing, heating.

You know, one of these kids are gonna go out and, you know, they might wire my house someday, or they might wire Meijers or Walmart or plumbing.

And it just, you know, it's giving them the skills to help them the rest of their lives, which is pretty awesome.

- I'd rather just work with my hands and be kinda on my feet and active, and also, just use my skills that I learned in trades.

And I do like the money, because I've learned that there's a lotta money in trade.

- [Stefanie] There's no question, without more affordable housing, communities can and will suffer.

It's already happening in schools where positions remain unfilled, putting extra burdens on teachers.

- I mean, I've heard stories of folks accepting jobs, coming to look for a place to live, and then having to say, "I'm sorry.

I can't take this job 'cause I can't find a place to live."

Traverse City is a great example.

We've been trying to work closely with that community in developing housing specifically for their school district, because they're suffering, right?

If you can't get teachers, who's teaching the children there?

We had hospitals apply and receive funding to provide down payment assistance to make it more affordable for their employees to purchase homes.

We know that housing is foundational to other parts of our lives, right?

We aren't gonna have success in education, we're not gonna meet our third grade reading goals if people don't have a place to come to at the end of the day.

We know that stable housing is key to both mental and physical health.

- Here, we know our yard is safe to run around in.

My kids each have their own room here.

And that was a big thing for me.

I'm an only child, so your room, your stuff.

We're close to the schools.

They have friends right down the road.

Now we have a river and a park (water burbling) just across the way, which is where my boys always fished at.

- Everyone deserves that.

It does change the trajectory of a family's life when they have a safe and affordable house.

They're able to look to the future, save for their kids' college, retirement, all those things that are so important that we know, but they're just not able to do until they're safe.

(screen whooshing)