The housing shortage hurts people with disabilities. Here's how they can find affordable homes.

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• People with disabilities often have lower incomes than the general population, making it difficult to afford homeownership.
• Accessible housing is limited and typically more common in expensive areas.
• By being flexible and strategic, people with disabilities can increase their chances of finding a home that suits their needs. 

The US is currently in the middle of a severe, chronic housing supply shortage. This shortage has impacted many people's ability to find homes that suit their budgets and needs, but the situation for people with disabilities is particularly difficult.

Homebuyers with disabilities often have specific needs when it comes to the accessibility of where they live. They also have lower incomes, further limiting the amount of housing available to them.

Buying a home when you have a smaller budget and particular needs can be challenging, but it's not necessarily impossible. Here's what homebuyers with disabilities should know about navigating the current housing market. 

The US is millions of units short of a healthy housing supply

Freddie Mac estimates that as of 2020, the US had a shortage of 3.8 million homes. This deficit is largely due to a steady decline in the construction of new homes since the Great Recession. 

Because there's such a shortage of available homes, competition among buyers has pushed home prices up — especially over the last few years, as historically low mortgage rates boosted demand. 

How does the housing shortage impact people with disabilities?

Disadvantaged groups are often the ones hurt the most by tough economic conditions, and the lack of affordable housing impacts individuals with disabilities for a variety of reasons.

There isn't enough accessible housing

Just 6% of housing units in the US are accessible for those with mobility-related disabilities, according to a 2020 Apartment List study. What's more, only 20% of these homes are occupied by individuals with disabilities.

This suggests that not only are homebuyers with disabilities competing over an extremely limited supply of accessible homes, but they're also competing for these homes against both people with disabilities and those who don't have a disability.

Some of the most accessible areas are also the most expensive

There are a variety of disabilities, so accessibility can mean different things to different people.

"When we think about accessible housing, we often think about stuff like wheelchair access, but that's really not the beginning and end of it," says Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities. 

Romig says that things like proximity to public transportation can be vital for these individuals. But homebuyers often pay a premium for conveniences like this, which can be difficult for those with lower incomes to afford. Often, the places with the most robust public transportation systems are cities, which also tend to be some of the most expensive places to live.

According to the Urban Institute, households with at least one disabled member earn less than 60% of what households with no disabled members earn. Additionally, one in five people with disabilities have "extremely low" incomes.

"You can save on rent or save on your mortgage by living in an outlying area," Romig says. "But then you can't access anything, so that doesn't really help you."

Disability benefit programs make affording a home difficult

Many individuals with disabilities receive some or all of their income from social programs such as Supplemental Security Income or Social Security Disability Insurance.

SSI benefits are provided to low-income individuals with disabilities. The average monthly benefit is $621, according to CBPP. Recipients are also prohibited from having more than $2,000 in assets (or $3,000 for married couples), which makes saving for homeownership extremely challenging.

SSDI pays slightly more, with recipients receiving an average of $1,236 each month. But SSDI is only available to those who have worked for a certain amount of time. 

Before you buy: Weigh renting vs. owning

Before you start your home search, it's worth first considering whether homeownership or renting better suits your needs and lifestyle.

"It isn't bad to be a renter," says Peggy Bailey, the vice president for housing and income security at CBPP.

While there are benefits that come with homeownership, like stability and wealth building, renting can be the smarter and more affordable choice in many cases. For example, if you don't plan to stay in the same city for at least five years, homeownership might not be a good investment. And in many cities, the average rent is lower than the average mortgage payment. 

"It depends on what the point of homeownership is," Bailey says. "If you're looking at it because of housing stability, then renting is fine. It just all depends on what they want for their life."

5 tips from real estate agents on finding affordable homes

Here's what the real estate agents we talked to had to say about navigating an increasingly expensive environment when you have a limited budget.

1. Look at houses that have been on the market for a bit

If you're looking for a good deal, stop refreshing Zillow to find homes as soon as they hit the market.

"For our clients, we focus them on homes that have been on the market for more than two weeks," says Ray York, a real estate agent with Keller Williams in Seattle. "In a hot seller's market, buyers wait for the new listings and jump on those, which creates a lot of competition and, in some cases, escalating prices."

Though many homes are snatched up as soon as they're listed, some will go under contract but then have things fall through. These houses go back on the market, York says, but buyers miss them because they're so busy looking for new inventory. 

Carrie George, a real estate agent with Keller Williams in Colorado, also utilizes this tactic to find sellers that are more willing to negotiate and give her buyers a better deal.

"The best negotiation we can ask for currently is a seller credit towards a temporary or permanent interest rate buy down," she says. "This strategy doesn't change the purchase price, but it can significantly change the buyer's monthly payment." 

2. Consider a fixer-upper or foreclosure

Buying a home that needs some TLC can be a great way to become a homeowner when you're working with a smaller budget. Plus, there are different types of renovation loans that let borrowers finance the cost of repairs into their mortgage.

"Homes that are short sales and foreclosures are great opportunities for home buyers with less capital," says Wales Cruz, a real estate agent with HomeSmart First Advantage Realty who works with clients in both New Jersey and New York. "Some of these homes require capital for improvements while others will be in great shape and require less upfront capital after closing. This is the primary way to circumvent the tight sellers market in these areas."

Solid renovation loan options for borrowers with disabilities include FHA 203(k) mortgages or conventional renovation mortgages. 

3. Be open-minded

Paring down your list of must-haves can help you find a suitable home. Consider which features will make or break your experience of your home. Would you be willing to live in a different neighborhood than the ones you're considering? Could you make your living space work with one bedroom rather than two?

"One of the most effective strategies is to expand the search area," says Mike Qiu, a real estate agent and owner of Good As Sold Home Buyers in Washington. "If the target neighborhood or city is too expensive, agents can suggest searching in adjacent areas or suburbs that offer similar amenities at a more affordable price point."

4. Start small

If you're currently only considering single-family detached homes, you might want to expand your search to include smaller property types.

"Consider a lower-priced alternative to the area, such as a condo or townhouse," says Boyd Rudy, a real estate agent with Keller Williams in Michigan. "These types of properties often require less maintenance and can be more affordable than a single-family home."

If you have your heart set on a detached home, you can use the equity you build in your condo or townhouse to help you purchase one when you're ready to sell.

5. Work with a great real estate agent

"It's important to have a realistic understanding of your local market and know what strategies are often being used, such as in the case of appraisal gaps, escalation clauses, waiving inspections, etc.," says Trang Janick, a real estate agent with Madison & Co. Properties in Colorado. "That is why it would behoove the buyer to connect with a local agent who has their finger on the pulse and is actively selling."

Look for agents who are willing to go the extra mile for you and utilize their connections and experience in your local market.

"I will reach out to all my off-market options," Bob Thompson, a real estate agent with Allison James Estates and Homes in Virginia, says of his process for finding homes for clients with smaller budgets. "For sale by owners. There are several different sites that have them. I will also reach out to my wholesale and investor network. I will let everyone know on my social media that I am looking for a client."