The Joint Center for Housing Studies of Harvard University released the latest version of its annual report, The State of the Nation’s Housing 2024. The report combines analyses of data from the U.S. Census Bureau, the U.S. Department of Housing and Urban Development (HUD), Freddie Mac, the National Association of Realtors, RealPage, and other sources to provide a comprehensive snapshot of the country’s housing supply and demand. The analyses reveal that, although the annual rate of growth in rent prices slowed in early 2024, rents are still increasing in three out of every five markets and remain well above pre-pandemic levels. As of March 2024, rents in professionally managed units had increased by 26% since early 2020. The median asking rent for newly constructed apartments was $1,710 at the end of 2023, up $270 from 2014.
Additionally, the report highlights how housing costs comprise a larger proportion of renters’ incomes than ever before as rents continue to rise far faster than wages. In inflation-adjusted terms, median rents have increased 21% since 2001 while median renter household incomes have only increased by 2%. In 2022, half of all renters – a record 22.4 million renters – were cost burdened, spending 30% or more of household income on housing and utilities. Over 12 million of these renters were severely cost-burdened, spending more than half of household income on housing and utilities. While renter households across all income levels have been affected by rising housing cost burden, cost burdens are most prevalent among renters with the lowest incomes. Among households with annual incomes less than $30,000, 83% of renters were cost-burdened and 65% were severely cost-burdened. On average, cost-burdened renters earning under $30,000 have just $170 remaining to cover all other basic needs after paying housing costs each month.
Low-income renters face additional threats to their housing security due to a limited and rapidly shrinking supply of affordable rental housing. According to the report, between 2012 and 2022, the rental housing market lost 2.1 million low-cost units with rents under $600. During this period, nearly 42 states lost more than 10% of their low-cost rental units. An additional 4 million units with rents between $600 and $999 were lost over the same period, resulting in an overall reduction of 6.1 million units with rents below $1,000.
Conversely, the report finds that the supply of higher-cost rental units increased between 2012 and 2022. The number of units with rents between $1,000 and $1,900 grew by 4.7 million, and those with rents above $2,000 increased by 4.1 million. The authors explain that the growth in rental housing supply is due in large part to the construction of 3.1 large multifamily properties with 20 or more units over the decade, which had median asking rents of $1,300 in 2022. Meanwhile, small multifamily properties with two to four units, which had median rents of $980 in 2022, increased by only 14,000 over the same time period.
While the authors support the use of regulatory zoning reforms and more cost-efficient construction strategies, such as manufactured housing and accessory dwelling units, to help increase both the supply and diversity of rental housing options, they emphasize that simply reducing construction costs will fail to serve the nation’s lowest-income renters. They call for policymakers at all levels of government to strengthen the housing safety net by increasing rental housing subsidies and preserving the existing public housing stock. Additionally, the authors call for continued efforts to address increasing rates of homelessness nationwide through initiatives targeting the underlying causes of homelessness and the failures of the shelter system.
Read the full report at: https://bit.ly/3xqjHLb