A forbidding national housing market, with numbers moving in the wrong direction for the last several years, appears to be etched in cement as millions of potential homebuyers remain priced out of the action.
That pricing-out is due to a powerful nexus of increasingly high home prices and interest rates, says the comprehensive new report just issued by the Harvard Joint Center for Housing Studies.
At the same time, says the report, the State of the Nation’s Housing 2024, the “number of renters with cost burdens has hit an all-time high.” In fact, notes the report, “rents remain up 26% since early 2020 and are rising in three out of every four markets.”
The story of rents outpacing income is not a new one, remarks Alexander Hermann, senior research associate at the Harvard center. But the “pandemic-era rent surge produced an unprecedented affordability crisis that continues,” she observed.
Nearly one in four homeowners are now “stretched worryingly thin,” says the report, a group that includes some “27.4% of homeowners aged 65 and over.”
Matters have only been made worse by an observable increase across the country in both insurance premiums as well as property taxes.
Perhaps not surprisingly, homelessness has reached a record high nationally of more than 653,100 people as of late last year. While some of the increase is owing to an ongoing immigration increase, the larger portion of higher numbers “reflects the end of pandemic protections, high rents, and the already meager housing safety net.”
For all of that, a concurrent rise in multifamily construction provides hope. Last year multifamily completions were up by 22%, “reaching the highest annual level in more than three decades.”
Continues the report: “As these units have come online, they have outnumbered even sizable increases in new rental households, and so the rental market has cooled slightly.”
It may be a slender reed, indeed, to hang hopes on, but the report additionally notes: “New construction is giving homebuyers more options.”
“New homes have constituted about a third of available single-family inventories since 2021, a sharp increase from the past four decades,” says the Harvard document, “during which new construction made up just 14% of inventory on average.”
By Garry Boulard
Image Credit: Courtesy of Pixabay
