JCHS report details housing constraints
The Joint Center for Housing Studies (JCHS) of Harvard University has released its 30th anniversary edition of "The State of the Nation’s Housing" report.
Since the initial report in 1988, more than 40 million housing units have been built, accommodating 27 million new households while replacing older housing.
But the latest edition points to challenges in today’s market, including a lack of new supply, which is helping fuel affordability challenges.
Construction started on 1.2 million new housing units in 2017, up slightly from 2016. The entire increase last year came from single-family starts, which were up 8.6% but, at just 849,000 units in 2017, remained well below the 1.1 million per year historical average. In contrast, multifamily starts declined by 9.7% to 354,100 units. A lack of new housing, along with Americans' lack of moving, has limited the number of homes for sale, which dropped to record lows in 2017.
Although it marked the eighth year of continuous growth, total housing starts only edged up to 1.2 million units in 2017 from 1.17 million in 2016. In percentage terms, last year’s increase was the smallest annual gain since the recession.
The JCHS said last year’s national homeownership rate of 63.9% was very close to the 64% rate of the late 1980s. However, the number of Americans burdened by housing costs has risen by nearly 14 million households over the past 30 years, the number of households with student loan debt has nearly doubled and the gap between black and white homeownership has widened.
“By many metrics, the U.S. housing market in 2018 is on sound footing,” said Chris Herbert, managing director of the JCHS. “But a number of challenges highlighted in the first 'State of the Nation’s Housing' report 30 years ago persist today. And in many respects, the situation has worsened for both the lowest-income Americans and those higher up the income ladder.”
Rising prices and rents combined with a growing lack of subsidies for low-income households has translated into nearly one-third of all households (38.1 million) paying more than 30% of their incomes for housing in 2016, which is the widely-accepted metric for affordability. This includes 20.8 million renters (47%) — and of these, 11 million pay more than half their income for housing. While these figures are down slightly from their peak during the recession, they are significantly higher than in previous decades.
“If incomes had kept pace with the economy's growth over the past 30 years, they would have easily matched the rise in housing costs,” noted Daniel McCue, a senior research associate at the JCHS and lead author of the report. “But that hasn’t happened.”
For more, read the 30th anniversary edition of "The State of the Nation’s Housing".
Since the initial report in 1988, more than 40 million housing units have been built, accommodating 27 million new households while replacing older housing.
But the latest edition points to challenges in today’s market, including a lack of new supply, which is helping fuel affordability challenges.
Construction started on 1.2 million new housing units in 2017, up slightly from 2016. The entire increase last year came from single-family starts, which were up 8.6% but, at just 849,000 units in 2017, remained well below the 1.1 million per year historical average. In contrast, multifamily starts declined by 9.7% to 354,100 units. A lack of new housing, along with Americans' lack of moving, has limited the number of homes for sale, which dropped to record lows in 2017.
Although it marked the eighth year of continuous growth, total housing starts only edged up to 1.2 million units in 2017 from 1.17 million in 2016. In percentage terms, last year’s increase was the smallest annual gain since the recession.
The JCHS said last year’s national homeownership rate of 63.9% was very close to the 64% rate of the late 1980s. However, the number of Americans burdened by housing costs has risen by nearly 14 million households over the past 30 years, the number of households with student loan debt has nearly doubled and the gap between black and white homeownership has widened.
“By many metrics, the U.S. housing market in 2018 is on sound footing,” said Chris Herbert, managing director of the JCHS. “But a number of challenges highlighted in the first 'State of the Nation’s Housing' report 30 years ago persist today. And in many respects, the situation has worsened for both the lowest-income Americans and those higher up the income ladder.”
Rising prices and rents combined with a growing lack of subsidies for low-income households has translated into nearly one-third of all households (38.1 million) paying more than 30% of their incomes for housing in 2016, which is the widely-accepted metric for affordability. This includes 20.8 million renters (47%) — and of these, 11 million pay more than half their income for housing. While these figures are down slightly from their peak during the recession, they are significantly higher than in previous decades.
“If incomes had kept pace with the economy's growth over the past 30 years, they would have easily matched the rise in housing costs,” noted Daniel McCue, a senior research associate at the JCHS and lead author of the report. “But that hasn’t happened.”
For more, read the 30th anniversary edition of "The State of the Nation’s Housing".