The housing industry is blessed with a very robust research and analysis organization called the Joint Center for Housing Studies at Harvard University. Annually, they release a very extensive data-filled report called State of the Nation’s Housing.
Here is a link to the report: http://www.jchs.harvard.edu/research/state_nations_housing
And here is a quick summary of the findings from Habitat for Humanity’s Government Relations and Advocacy Office:
There are a number of interesting takeaways from the report that discuss the current overall state of housing in the United States:
- It’s safe to say that the nation has not fully recovered from the 2008 housing crisis.High housing costs and underwater mortgages are still plaguing the market. That being said, the market is still steadily improving, and was never expected to skyrocket back to pre-crash levels.
- Rental affordability is a major challenge. Supply has increased in the past few years, but cannot keep up with demand. The number of high-income renters continues to grow as baby boomers downsize and millennials embrace the rental lifestyle. This incentivizes builders to continue focusing on high-income rentals to satiate the market.
- The private sector doesn’t see affordable housing as a worthwhile investment. It is not financially feasible to build homes for low-income families. Local land costs and zoning regulations are making development costs so high that a focus on affordable housing isn’t worth it for large companies. Also, the lowest homeownership rate in 50 years means a greater move into renting.
- What can be done on the state and local level? Decreasing regulatory burdens and increasing resources to make it feasible for large companies to enter the market.
- The issue of income equality continues to grow. Income levels are not keeping up with increasing costs. Ways to improve this include: increasing federal funding for programs like HOME and CDBG. At the state level, zoning reform aimed at increasing the number of units in cities and making inclusionary zoning policies. Creating jobs at wages that can provide for families.
- Segregation and concentrated poverty. Studies have shown that where you grow up has a huge impact on lifelong income, health, education, etc.
- What is the role of large construction companies in providing affordable housing? These companies are focused on feasibility (profit-driven), but can play a role if regulations and zoning issues are taken care of. Profitability depends on getting land at the right price, lower development costs, and ensuring there are buyers with access to mortgages.
- Role of the federal government. Last year the federal government spent $200 billion on subsidies, but 75% of that went to higher income mortgage tax breaks and similar tax credits. The majority of the housing built will always be in the private sector without subsidies, so it is important to learn how to make a percentage of those affordable.
- The national homeownership rate. The rate is actually a lot lower if you include the 4.3 million people underwater on mortgage payments. Who is missing from the home owning picture? First time buyers. 30% of the market share is first time buyers, but it should be 40%.