Each year, the Joint Center for Housing Studies of Harvard University (JCHS) publishes a State of the Nation's Housing report documenting the pace of housing production, cost of housing, and changing market conditions and household indices.
Released last month, the State of the Nation's Housing 2019 report's main finding is that housing production is still lagging, which means home prices and rents continue to climb due to constrained housing supply. With household growth expected to remain steady over the next decade, the main test of the housing market will be if it can produce a “broader and more affordable range of housing options for tomorrow's households.”
There are five other primary findings in the report summarized below.
- A shortfall in supply shortfall continues to be a problem. The housing market is still slowly recovering from the recession more than a decade ago. Last year, the market produced 1.2 million units, the lowest number since 1982 (excluding the recession period). JCHS estimates that the market should have produced 1.5 million units to keep pace with demand in the market. This lag in production is attributed to a number of factors including a tight labor market, increased land costs and regulatory constraints all of which result in high end housing being built.
- Homeownership is trending up. The 2018 homeownership rate stood at 64.4%, a modest 0.5% increase from the year before. It's an encouraging sign, since the rate had fallen 12 consecutive years prior to 2017. Households in the age group of 25-39 witnessed a 2% increase in homeownership, the largest increase in any demographic. The report estimates that over the next decade, there could be between 8 to 10.1 million new homeowners if trends continue. But it's contingent on uncertain factors—home prices, interest rates, credit conditions and the supply of entry-level homes.
- The rental market is remaining steady. JCHS estimates 400,000 new renters over the next decade. However, despite a boom in multifamily production, vacancy rates continue to fall. This prolonged restriction of supply has led to increased rents which rose 3.6 percent last year or twice the pace of inflation.
- Cost burdens are still worrisome, primarily for renters. The percentage of cost burdened households (a household that spends more than 30% of income on housing) fell slightly to 31.5%. It's an improvement, but it's largely because homeowners are faring better at a 22.5% cost burdened rate (down 8% since 2010). By contrast, 47.4% of rental households are cost burdened.
- Homelessness is down overall but increasing in high-cost areas. In the past five years, the number of individuals experiencing homelessness fell by 38,000. The report credits this reduction to an increase in permanent supportive housing and “housing first” policies that provide housing without conditions. That said, the population of individuals experiencing homelessness has skyrocketed in high-cost areas like California (up 25%), Oregon (up nearly 50%), Washington (up 80%), and Colorado (up more than 100%).
We invite you to check out the interactive maps (located here) to see what's going on in your area in addition to reading the full report. We also invite you to follow the Joint Center for Housing Studies of Harvard University on twitter @Harvard_JCHS to learn about their report and stay up to date on housing trends and issues.
On the House blog posts are meant to provide general information on various housing-related issues, research and programs. We are not liable for any errors or inaccuracies in the information provided by blog sources. Furthermore, this blog is not legal advice and should not be used as a substitute for legal advice from a licensed professional attorney.