The fledgling U.S. housing recovery lost momentum last year as homeownership rates continued to fall,
single-family construction remained near historic lows, and existing home sales cooled, concludes a new report titled "The State of the Nation's Housing" from the Joint Center for Housing Studies of Harvard University.
Making sense of the story
• Rental markets continued to grow, fueled by another large increase in the number of renter households. However, with rents rising and incomes well below pre-recession levels, the U.S. is
also seeing record numbers of cost-burdened renters.
• The flip side of falling homeownership rates has been exceptionally strong demand for rental housing, with the 2010s on pace to be the strongest decade for renter growth in history.
• While soaring demand is often attributed to the millennials' preference to rent, households aged 45-64 in fact accounted for about twice the share of renter growth as households under the age of 35.
• The other byproduct of this surge in rental demand is that the national vacancy rate fell to its lowest point in nearly 20 years. Given the limited supply of rental units, rents rose at a 3.2 percent rate last year- twice the pace of overall inflation.
• While the cost-burdened share of homeowners began to recede in 2010 (because some homes were lost to foreclosure, and low interest rates helped other homeowners reduce their monthly costs), the cost-burdened share of renters has held near record highs. In 2013, almost half of all renters had housing cost burdens.
• Cost burdens are climbing the income ladder, affecting growing shares of not just low-income renters but moderate- and middle-income renters as well.
• The cost-burdened share of renters with incomes in the $30,000-45,000 range rose to 45 percent between 2003 and 2013, while one in five renters earning $45,000- 75,000 are now cost-burdened as well.
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