A new research report done on the Housing Market by Harvard University has shown how many people cannot afford to buy a home. It also revealed alarming numbers on the amount of Americans trapped renting, as well as the decline of cheap housing and renting across the country.
Declining home ownership
According to the 2017 State of the Nation's Housing report done by the Joint Center for Housing Studies of Harvard University, home ownership in America is continuing its steady decline. The report found that one of the major reasons behind this was that over 38 million Americans cannot afford to pay for housing, which is an increase of 146% in the past 16 years.
This is because in many markets across the country home prices have continued to increase, while wages have mostly remained stagnant. The report found that last year, the rate of home ownership declined to 63.4%, which was the 12th consecutive year it decreased.
The housing market has also not fully recovered from the recession across the country. While home values in certain parts of Florida, Calfornia and New England have increased by up to 40% since 2000, they have decreased by as much as 46% in certain parts of the South and Midwest over the same time period. The report states that 70.3% of the lowest-income households face serious burdens due to housing cost. This means that over 50% of their income is going to housing and can't be used to pay down debt or putting into savings.
Many Americans stuck renting and it's costly
In conjunction with home ownership across American declining, rental prices across the country have increased. This is causing millions of people to have to pay more than they should as the housing market reacts to all of this. The Harvard University report detailed that many people who want to buy homes are stuck renting.
Since 2005, there has been a broad-based uptick in rental demand, which includes several kinds of households that normally prefer homeownership over renting.
The Harvard report also detailed how rent gains across America have vastly outpaced inflation, with supply becoming tight, especially in metro areas. Most new rental units being constructed are high end, with the number of units renting for $2,000 or more have increased by over 1.5 million between 2005 and 2015. In contrast, units available for less than $800 dollars have decreased over that time period by $261,000.
