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U.S. Unprepared to Meet the Housing Needs of its Aging Population

September 3, 2014 Comments off

U.S. Unprepared to Meet the Housing Needs of its Aging Population
Source: Joint Center for Housing Studies at Harvard University

America’s older population is in the midst of unprecedented growth, but the country is not prepared to meet the housing needs of this aging group, concludes a new report released today by the Harvard Joint Center for Housing Studies and AARP Foundation. According to Housing America’s Older Adults—Meeting the Needs of An Aging Population, the number of adults in the U.S. aged 50 and over is expected to grow to 133 million by 2030, an increase of more than 70 percent since 2000 (see interactive map). But housing that is affordable, physically accessible, well-located, and coordinated with supports and services is in too short supply.

Housing is critical to quality of life for people of all ages, but especially for older adults. High housing costs currently force a third of adults 50 and over—including 37 percent of those 80 and over—to pay more than 30 percent of their income for homes that may or may not fit their needs, forcing them to cut back on food, health care, and, for those 50-64, retirement savings (see infographic). Much of the nation’s housing inventory also lacks basic accessibility features (such as no-step entries, extra-wide doorways, and lever-style door and faucet handles), preventing older persons with disabilities from living safely and comfortably in their homes. Additionally, with a majority of older adults aging in car-dependent suburban and rural locations, transportation and pedestrian infrastructure is generally ill-suited to those who aren’t able to drive, which can isolate them from friends and family. Finally, disconnects between housing programs and the health care system put many older adults with disabilities or long-term care needs at risk of premature institutionalization.

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Interactive Map: Where Can Renters Afford to Own?

August 19, 2014 Comments off

Interactive Map: Where Can Renters Afford to Own?
Source: Joint Center for Housing Studies of Harvard University

Homebuyer affordability remains near an all-time high, so where are all the first-time homebuyers? According to indexes that incorporate gross measures of house prices, interest rates, and household incomes, affordability remains at unprecedented levels. The National Association of Realtors® index, for instance, shows that the median-income household can afford to buy a home in all but 7 percent of the largest metros. Given that affordability looks good on paper, the lack of first-time homebuyers in all metros has been surprising. In 2013, first-time homebuyers made up 38 percent of home purchases, below the historical average of 40 percent, dating back to 1981. The most recent American Housing Survey shows that 3.3 million households were first-time buyers in 2009-2011, a 22 percent drop from the 2001 survey, which covered 1999-2001. This decline in first-time buyers comes in spite of real mortgage payments for the median home that remain below $800 (levels unprecedented before the recession) and a 7 percentage point decline in the mortgage payment-to-income ratio since 2001.

Historically, the majority of first-time buyers are households aged 25-34. Looking at renters in this age group, most would find the monthly costs of homeownership affordable in many metros across the country. Indeed, in 42 of the 85 metros studied, more than half of renters can afford the monthly costs of homeownership. Nearly 30 percent of the 25-34 year old renters in our sample lived in these affordable metros. Only in six metros, concentrated almost exclusively in California, are renter incomes so low compared to house prices that less than 30 percent of renters aged 25-34 can afford the costs of owning.

So why, given that so many metros are affordable to potential 25-34 year old first-time buyers, has the first-time buyer share remained low? Many demographic and economic forces are constraining the transition to homeownership for renters in their 20s and 30s.

The State of the Nation’s Housing 2014

July 7, 2014 Comments off

The State of the Nation’s Housing 2014
Source: Joint Center for Housing Studies of Harvard University
From press release:

The U.S. housing recovery should regain its footing, but also faces a number of challenges, concludes The State of the Nation’s Housing report released today by the Joint Center for Housing Studies of Harvard University. Tight credit, still elevated unemployment, and mounting student loan debt among young Americans are moderating growth and keeping millennials and other first-time homebuyers out of the market.

Although the housing industry saw notable increases in construction, home prices, and sales in 2013, household growth has yet to fully recover from the effects of the recession. Young Americans, saddled with higher-than-ever student loan debt and falling incomes, continue to live with their parents. Indeed, some 2.1 million more adults in their 20s lived with their parents last year, and student loan balances increased by $114 billion.

Still, given the sheer volume of young adults coming of age, the number of households in their 30s should increase by 2.7 million over the coming decade, which should boost demand for new housing.

Weak Income Growth and Rising Rents Create Severe Affordability Problems for American Renters

December 18, 2013 Comments off

Weak Income Growth and Rising Rents Create Severe Affordability Problems for American Renters
Source: Harvard Joint Center for Housing Studies

Affordability problems for renters have skyrocketed over the past decade both in number and the share of renters facing them, according to a new report on rental housing from the Harvard Joint Center for Housing Studies. The inability of so many to find housing they can afford dramatically impacts the health and well-being of U.S. renters, as lower-income households cut back on food, healthcare, and savings, just to keep up.

Released today at an event held at the Newseum in Washington, DC, the report, America’s Rental Housing: Evolving Markets and Needs, finds that half of U.S. renters pay more than 30 percent or more of their income on rent, up an astonishing 12 percentage points from a decade earlier. Much of the increase was among renters facing severe burdens (paying more than half their income on rent), boosting their share to 27 percent. These levels were unimaginable just a decade ago, when the share of American renters paying half their income on housing, at 19 percent, was already a cause for serious concern.

Escalating rental affordability problems come at a time when the share of Americans that rent has increased from 31 percent in 2004 to 35 percent in 2012. In fact, the 2000s marked the strongest numerical growth in renter households in the last fifty years. As ownership rates fell, housing markets have adjusted dynamically to the increased demand for single-family rentals, with about 3 million existing homes switching from owner to rental occupancy from 2007-2011 alone.

On the strength of the surge in rental demand, rental vacancies have fallen, rents have climbed, and construction of new rental housing has picked up sharply, giving an important spur to the struggling residential construction market. Rising rents combined with softness in wages has put the squeeze on affordability. The report points out that between 2000 and 2012 real median rents (adjusted for inflation) nationally increased by 6 percent, while over the same period the real median income of renters dropped by 13 percent. More than ever before, the private market struggles to provide decent housing that is affordable for people of even modest means.

Homeownership Symposium – Reexamining the Social Benefits of Homeownership After the Housing Crisis

August 29, 2013 Comments off

Homeownership Symposium – Reexamining the Social Benefits of Homeownership After the Housing Crisis
Source: Joint Center for Housing Studies at Harvard University

The purposes of this paper are, first, to present a conceptual model of how the housing crisis and ensuing recession might impact both interest in and the social impacts of homeownership. A second purpose is to review the limited empirical evidence on how, if at all, the recession and housing crisis have altered interest in homeownership or altered its actual impacts. A third purpose is to provide an updated review of the literature of the social impacts of homeownership, most of which was conducted before the recession. Fourth, we will draw some preliminary conclusions on how the recession and housing crisis may have altered the social impacts and what additional research is needed on this important topic. In this paper we focus on five social impacts: psychological health, physical health, parenting and children’s academic achievement and behavior, social and political participation, and neighborhood/social capital.

The U.S. Housing Stock: Ready for Renewal

March 19, 2013 Comments off

The U.S. Housing Stock: Ready for Renewal

Source: Joint Center for Housing Studies of Harvard University

After languishing for several years, the U.S. remodeling industry appears to be pulling out of its downturn, and a renewal of the nation’s housing stock is underway. The U.S. Housing Stock: Ready for Renewal is the latest report in the Improving America’s Housing series, published by the Remodeling Futures Program at the Joint Center. Foreclosed properties are being rehabilitated, sustainable home improvements are gaining popularity, older homeowners are retrofitting their homes to accommodate their evolving needs, and the future market potential is immense, as the emerging echo boom generation is projected to be the largest in our nation’s history.

Housing Landscape 2012: Nearly a quarter of working households spend more than half of income on housing

February 29, 2012 Comments off

Housing Landscape 2012: Nearly a quarter of working households spend more than half of income on housing
Source: Center for Housing Policy

A new study by the Center for Housing Policy confirms that falling home prices have not solved the housing affordability problems of the nation’s working households. In fact, the Center’s Housing Landscape 2012 report found that the share of working households paying more than half their income for housing rose significantly between 2008 and 2010 for both renters and owners. This annual report explores the latest Census data from 2008 to 2010 on housing costs and income, including housing cost burden data from the 50 largest U.S. metropolitan areas, all 50 states and the District of Columbia. Among other conclusions, Housing Landscape 2012 finds that nearly one in four working households in the U.S. spends more than half of total income on housing.

Housing cost burden for working households grew over the two-year period studied largely due to falling incomes and rising rental housing costs. Report author Laura Williams says rents rose due to increased demand for rental housing which has outstripped supply, partly due to the crisis on the homeownership side of the market.

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