The Joint Center for Housing Studies of Harvard University released The State of the Nation’s Housing 2015 on June 24, reporting that the growing number of renter households has stressed the rental housing market nationwide—causing vacancies to fall while rents continue to rise. The national rental vacancy rate in 2014 fell to its lowest point (7.6%) in twenty years, while rents rose at 3.2%, twice the rate of inflation.
The homeownership rate fell for the tenth consecutive year in 2014 to 64.5%, a 20-year low, while an average of 770,000 renter households entered the market each year since 2004. With the demand for rental housing growing, availability decreased dramatically for the most affordable segment of the rental market. The number of vacant rental units with rents less than $800 fell 12% between 2013 and 2014, contributing to 90% of the overall decline in rental vacancies.
While 1.2 million apartments were added to the market since 2010, they serve the higher end of the market, with a 2013 median rent of $1,290. At this rent, more than two-thirds of renter households cannot afford market rent.
Twenty-six percent of all renters faced a severe housing cost burden in 2013, spending more than half their income for rent and utilities. The percentage of renters with income less than $15,000 and a severe housing cost burden remained at 72% in 2013. These households spent 70% less on healthcare and 40% less on food than their counterparts without a housing cost burden. In contrast, only 0.1% of renters with income greater than $75,000 had a severe housing cost burden.
In 2013, HUD provided assistance to 4.8 million renters. One-third of all HUD-assisted households were headed by a person over age 62, while another one-third included a person with a disability. However, HUD remains unable to assist many low income households. While the number of very low income renters, those with income up to 50% of the area median income, qualifying for housing assistance increased 18% between 2003 and 2013, just 26% received housing assistance in 2013.
The unmet need for affordable rental housing continues to grow, while appropriations for affordable rental housing continues to shrink. The authors note, however, that capitalization of the National Housing Trust Fund would be an important step toward addressing the rising need for additional affordable rental housing.
The State of the Nation’s Housing 2015 is at http://www.jchs.harvard.edu/research/state_nations_housing