Harvard: The Housing Market is a Tale of Two Cities
Two realities exist in today’s housing market, according to a recent Harvard study.
Despite supply chain challenges, developers are building more new apartments in the U.S. today than at any other time since 1973, according to the State of the Nation’s Housing Report for 2022 released by the Harvard Joint Center for Housing Studies, which in part relied on data from RealPage Market Analytics. Rent growth is stronger now than ever in the undersupplied housing market. Demand for new units is likely to continue in the near term, rising to meet the big volumes of scheduled deliveries.
On the other hand, lower-income households are not likely to feel much relief from soaring housing prices, especially given the government support implemented during the COVID-19 pandemic has dried up. Supply of low-income housing has not kept pace with increasing demand in the affordable space. Furthermore, the existing affordable stock “is not equipped to meet the accessibility needs of an aging population or to withstand the impacts of climate change,” according to the report.
Additionally, Harvard reported:
• The age group most likely to form new households – those from 25 to 34 years old – is now the largest in history, increasing by 3.7 million in the past decade.
• Single-family home price appreciation in the U.S. saw the largest annual jump in three decades, hitting 20.6 percent in March 2022.
• The share of households paying over one third of their incomes toward housing climbed to 30 percent in 2020.
• Some of the biggest rental rate increases were in gateway coastal markets that saw diving prices during the early days of the pandemic.
The report is available for download on the Harvard Joint Center for Housing Studies website.