Last month, the Joint Center for Housing Studies of Harvard University released its “The State of the Nation’s Housing 2010” report. The report describes a housing market sputtering toward stabilization, but facing significant obstacles.
Indeed, many aspects of the housing market continue to erode. The Joint Center reports that one in seven homeowners owed more on their mortgages than their homes were worth at the end of 2009. Similarly, foreclosures continue to rise; 2.1 million loans were in foreclosure during the first quarter of 2010. Nonetheless, 2009 saw an increase in home affordability and a surge in first-time homebuyers (due in large part to the first-time homebuyer tax credit).
On the rental front, the number of renter households grew by 800,000 in 2009. But, due to a combination of new multifamily completions and a jump in the number of existing homes for rent, vacancies continued to rise and rental prices correspondingly sagged. (For information regarding Chicago-area rents and vacancy data, see DePaul University's Institute for Housing Studies first-quarter 2010 Cook County Rent and Vacancy Report.)
Despite increased vacancies and lowering prices, housing continues to become less and less affordable for more families. There has been a significant increase in the number of households with a severe housing cost burden (more than 50% of income spent on housing) since 2000. As of 2008, one in four renter households and over 44 million Americans, of which nearly 14 million are children, are living within households with severe cost burdens. Over half of renter households spend over 30% of household income on housing. Of these households, low-income, single-parent, minority families are more likely to suffer from harsher cost burdens.
Amid the upheaval in the housing market, The State of the Nation’s Housing 2010 makes clear that the nation’s housing remains unaffordable for more and more low-income Americans--especially in light of the staggering rate of unemployment. Indeed, while the number of vacant rental units priced at $1,500 or above per month jumped 23 percent, the number of vacant rental units for less than $600 remained virtually the same as the year before. Exploring ways to increase the availability of housing that is affordable to American families is more important now than ever.