17 November 2018

Housing We Want In America Out Of Reach

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Housing in America may be a microcosm of the nation itself: a bit less dynamic, far more costly and uncomfortably more unequal than we’d like.  

That’s according to one of the most comprehensive annual reports on the topic, the State of the Nation’s Housing, released Tuesday.

The report, which marks its 30th anniversary this year, is produced annually by the Joint Center for Housing Studies at Harvard University. This year’s edition describes an America in which fewer people are homeowners now than when it was first published, in 1988.

And the situation for a growing group of renters? It’s only a bit less grim than a few years ago. Renters are bearing the brunt of the affordability crisis — but that’s burdening owners too. Ten years on from the housing crisis, there are still a lot of people who can’t afford to sell, there are even more who can’t afford to buy, and despite low unemployment, an awful lot of Americans are tied to jobs or family situations that don’t permit mobility.

That may all sound academic, but these trends have real-world consequences for millions of individuals and for the nation as a whole. The charts that follow illustrate some of the report’s most powerful findings.

Nearly one-third of American households, or 38.1 million, paid more than 30% of their incomes for housing in 2016, making them “cost-burdened” by the center’s standards. The share of renters who are cost-burdened has made a little progress since the end of the housing crash and recession, falling to 47.5% in 2016 from 50.2% in 2010. The share of burdened homeowners, meanwhile, fell during that time — to 23.0% from 30.4%.

The study also finds that Americans are staying in one place longer, losing much of the dynamism that once characterized the populace’s impulse to chase opportunity. That’s in part the legacy of the housing crisis, which left lots of people with homes they couldn’t sell — or jobless. And now, the hyper-competitive real estate market makes a lot of people think twice about looking for an upgrade.

Inequality is widening not just between owners and renters, but also between whites and people of color. The homeownership rate among African-Americans has ticked up, a bit, in the years since the crisis, but still sits near long-time lows. The gap between the homeownership rate for whites and blacks was 29.2 percentage points in 2017, the widest in decades. That’s particularly poignant given that African-Americans had far more of their household wealth wiped out by the crisis compared to whites.

As housing costs chew up personal budgets, Americans are increasingly unable to spend money on the basics — food, transportation and health care — let alone discretionary splurges.

What does this all mean for the future of home ownership?

It’s nearly impossible to say, as this animated map intimates. Watch as home prices jump further and further out of reach as the housing bubble inflated. And once that bubble popped, it was hard to imagine crawling out of that hole. Yet here we are. Stay tuned for next year.

Click here for the original article from Market Watch.

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