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Alaska Department of Labor: Home prices and affordability have worsened as supply stays constrained
Summary
Dan Robinson of the Alaska Department of Labor told the Senate Finance Committee that inflation-adjusted home prices and new-home costs have risen sharply over the last several years, supply has been constrained for decades and the average number of wage earners needed to afford a home rose to 1.7 in 2023.
Dan Robinson, research chief for the Alaska Department of Labor and Workforce Development, told the Senate Finance Committee on April 2 that Alaska’s housing market has become markedly less affordable and that constrained housing supply and higher building costs are central to the trend.
Robinson said sales prices have “gone up a lot” and that new single-family home prices have risen faster than inflation in recent years. He pointed to supply-chain disruptions for building materials and labor shortages as contributors to higher costs for new construction, and noted that mortgage rates moved up about 350 basis points over two years.
Robinson said the department’s affordability index— which incorporates home prices, interest rates and wages—shows the average number of wage earners needed to afford a home rose to 1.7 in 2023, “which is as high as it's been since ’06.” He added, “If you've got somebody looking to buy a home and they say it's hard, well it is. The data confirms that.”
The presentation placed current supply constraints in historical context: permitting of new permanent housing units reached roughly 12,000 a year during past oil booms and fell sharply after the 1980s crash and again after the Great Recession. Robinson said Alaska has been permitting relatively few units for an extended period, a factor that limits the market’s ability to respond to demand.
Robinson also described how higher wages in construction and lingering COVID-era supply problems raised the cost of building new homes, and emphasized that housing affordability varies locally across the state. He noted the department conducts an annual rental survey and works with the Alaska Housing Finance Corporation on lending and rental data.
Why it matters: Rising home prices combined with higher interest rates and constrained new construction reduce affordability for Alaskans and complicate workforce recruitment and retention across industries. Committee members requested additional data; Robinson said his office can provide slide-level detail and local breakdowns on request.
Robinson closed the housing segment by reiterating the department’s approach: produce accurate, objective data that is relevant to decision-makers. He offered to provide more localized housing data if the committee desired.
