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Homeownership rates are down, renters are increasing and home inventory is on the decline, this and more troubling truths for the American rental market are revealed in Harvard University’s Joint Center for Housing Studies State of the Nation’s Housing report.
The study, which has been released annually since 1988 is “an essential resource for both public policy makers and private decision makers in the housing industry,” providing “a current assessment of the state of the rental and homeownership markets; the economic and demographic trends driving housing demand; the state of mortgage finance; and ongoing housing affordability challenges.”
The report confirms significant positives, such as increased housing starts and strong home sales. Unfortunately, these improvements are overshadowed by the grim reality that a massive 36.4 percent of Americans households rent, and elevated home prices—which are comparable to pre-recession figures—are preventing renters from transitioning into homeownership.
Report Findings:
• Single-family housing starts rose to 715,000 in 2015, a 10.5 percent; multifamily starts were at a 27-year high of 397,300, up 11.8 percent
• The median rate for new multifamily units built in 2015 increased to $1,381 per month, 70 percent higher than the median contract rent for all multifamily units
• After losing over 2 million workers between 2007 and 2013, of which only 40 percent returned to the industry, the National Association of Home Builders (NAHB) reports labor shortages in several trades
• The amount of construction-ready land in 50 metro areas decreased by 30 percent from 2008 to 2013
• New home sales increase 14.6 percent to 501,000 in 2015; existing home sales rose 6.3 percent to 5.3 million
• Existing home inventories fell 1.9 percent to 2.1 million units in 2015
• The most affordable properties have experience the highest reductions in inventory; inventories of bottom- and middle-value tier units fell over 38 percent between 2010 and 2015
• The median price of existing homes rose 6.6 percent to $222,400; median prices for new homes rose 4.7 percent to $296,400
• 1 million homeowners were lifted out of negative equity as a result of rising home prices
To view the full report, please, click here.