The national homeownership rate increased for the first time in 13 years in 2017, growing to 63.9 percent, according to the Harvard Joint Center for Housing Studies (JCHS) 2018 State of the Nation’s Housing report. However, the number of Americans burdened by housing costs rose by about 14 million households, with the number of households facing student loan debt nearly doubling since 1988.
“By many metrics, the U.S. housing market in 2018 is on sound footing,” Managing Director of JCHS Chris Herbert said in a statement. “But a number of challenges highlighted in the first State of the Nation’s Housing report 30 years ago persist today, and in many respects the situation has worsened for both the lowest-income Americans and those higher up the income ladder.”
Between 1990 and 2016, the median price for a home increased 41 percent faster than inflation, while the median rent grew 20 percent faster, according to the report. Meanwhile, the real median income of households in the bottom quartile grew by just 3 percent, and the median income for those aged 25 to 34 increased by only 5 percent.
“If incomes had kept pace with the economy’s growth over the past 30 years, they would have easily matched the rise in housing costs,” Senior Research Associate at JCHS Daniel McCue said in a statement. “But that hasn’t happened.”
The low supply of new housing is also noted as a factor in affordability challenges in the report.
“The relative lack of new housing, along with Americans’ decreasing propensity to move, limited the number of homes for sale, which dropped to record lows in 2017,” the report states. “As a result, house prices rose 6.2 percent in 2017 and now top their pre-crisis peaks in a majority of the nation’s largest metros.”
Rental conditions have eased somewhat, growing by “a more modest” 3.7 percent, a sign that U.S. households are returning to home buying after a decade of increasing rental demand.
Since 1988, the U.S. has added more than 40 million housing units and 27 million new households.
The full report can be found here.
