State of the Nation's Housing: Robust, but not without challenges

According to Harvard's Joint Center for Housing Studies, we're getting closer to a "mission accomplished" status in the housing recovery. However, we're obviously not without our challenges.

The 2016 State of the Nation's Housing report confirmed that the momentum in the housing recovery is enough to create growth in the U.S. economy, thanks to robust rental demand and rising sales, prices, and new construction of single-family homes.

Additionally, incomes are on the up and up, especially among the crucial Millennial demographic that is poised to form new households over the next decade.

Affordability issues continue to plague growth, however, as does the growing concentration of poverty. According to the report, households earning under $25,000 accounted for nearly 45% of the net growth in US households in 2005–2015.

Plus, the national homeownership rate has been on an "unprecedented" 10-year downtrend, reaching 63.7% in 2015.

“Tight mortgage credit, the decade-long falloff in incomes that is only now ending, and a limited supply of homes for sale are all keeping households—especially first-time buyers—on the sidelines," said Chris Herbert, managing director of Harvard’s Joint Center for Housing Studies. "And even though a rebound in home prices has helped to reduce the number of underwater owners, the large backlog of foreclosures is still a serious drag on homeownership.”

Meanwhile, increases in rental demand are occurring across all age groups, income levels, and household types. However, most of this new housing is intended for high-income renters. The number of cost-burdened renters hit 21.3 million in 2014. Additionally, 11.4 million of these households paid more than half their incomes for housing, a record high according to the organization.

“And compounding these challenges,” added Daniel McCue, a senior research associate at the Joint Center, “residential segregation by income has increased. Between 2000 and 2014, the number of people living in neighborhoods of concentrated poverty more than doubled to 13.7 million.”