It's already the issue that keeps builders, developers, architects, and their supplier partners up at night. And, it's getting worse. And, you know what? It's going to get worse still.

It's housing affordability.

Here's new data from the ATTOM Data Solutions (RealtyTrac) Home Affordability Index for third quarter 2016, which indicates one in four U.S. county housing markets were less affordable than their historic affordability averages, up from 22% the prior quarter, and up from 19% a year earlier.

Prices--for sale and for rent--keep rising, widening gaps between income gains and monthly home payments because the demand for housing exceeds supply, especially for middle- and lower-tier price bands of new, used, for-sale, and for-rent housing.

The mismatch between supply and demand--one that is likely to continue for the near future-- is exacerbated by cost creep that labor capacity constraints and over-regulated lots have fueled.

Atom Data Solutions vp Daren Blomquist writes:

Out of the 414 counties analyzed in the report, 101 counties (24 percent) had an affordability index below 100 in the third quarter of 2016, meaning that buying a median-priced home in that county was less affordable than the historic average for that county going back to the first quarter of 2005.

Counties less affordable than their historic averages in Q3 2016 included Harris County (Houston), Texas; Kings County (Brooklyn), New York; Dallas County, Texas; Bexar County (San Antonio), Texas; and Alameda County, California in the San Francisco metro area.

Affordability worsened in 261 counties (63%) compared to a year ago, including Los Angeles County, California (2% worse); Harris County (Houston), Texas (35% worse); Maricopa County (Phoenix), Arizona (3% worse); Miami-Dade County, Florida (5% worse); Queens County, New York (1% worse); and King County (Seattle), Washington (2% worse).

According to BUILDER sibling Metrostudy chief economist Mark Boud, housing has a shortfall of 2.8 million unbuilt homes, based on demand fundamentals. Until there are more houses developed and built--especially for pent-up younger, more financially challenged households, price and rent power will continue to push up home values for new and resale homes. And what this means, for builders, is more up-at-night worries because they don't feel they can pull the trigger on lower priced homes, especially as labor and lot costs push upward.

The gorilla in the room, of course, is that while backsliding affordability feels like a problem for folks in housing, it's actually a strategy on the part of municipalities who'd like to freeze development.

One of the ways to suppress residential development--particularly for less well-heeled residents--is to layer costs in money and time into the home site permitting and development process, and then press "accelerate."