ANALYSIS OF THE IMPACT OF INCREASING COSTS OF CONSTRUCTION MATERIALS ON HOUSING AFFORDABILITY

Abstract. This study examines the impact of rising construction material costs on housing affordability, focusing on Ukraine, the European Union, and the United States during the period 2019–2024. The research employs statistical datasets and econometric analyses to assess the relationship between construction material price inflation and the declining accessibility of housing. It identifies significant price growth in essential materials such as steel, concrete, and timber, far exceeding general inflation rates. These trends are attributed to a combination of global and regional factors, including supply chain disruptions caused by the COVID-19 pandemic, geopolitical instability, energy price surges, and shortages of critical raw materials. The analysis establishes a direct and strong correlation between the escalation of material costs and housing affordability indices. In all regions studied, the increased cost of basic materials resulted in higher construction expenses, which, in turn, elevated housing prices relative to average household incomes. In the case of Ukraine, the situation is exacerbated by additional factors such as the ongoing security crisis and the urgent demand for large-scale residential reconstruction. Comparative evaluations reveal significant variations in housing price-to-income ratios, demonstrating a global trend toward reduced affordability. The study also highlights the broader socio-economic implications of these dynamics, including increased financial burdens on households, shifts in demographic and migration patterns, and growing inequality in access to housing. These challenges underline the need for comprehensive solutions that address both immediate impacts and long-term sustainability. To mitigate the adverse effects of material cost inflation, the study proposes a multi-faceted strategy. Key recommendations include government-led initiatives to stimulate domestic production of construction materials, strengthen affordable housing programs, and reform mortgage financing systems. Additional measures emphasize the adoption of energy-efficient and cost-effective construction technologies, diversification of material supply chains, and the exploration of alternative financing mechanisms such as public-private partnerships. The findings provide actionable insights for policymakers, industry leaders, and stakeholders aiming to improve housing affordability in the face of rising material costs. By balancing short-term stabilization efforts with long-term planning, the proposed strategies seek to foster more equitable and resilient housing markets.