Washington, D.C. – June 25, 2015 – (RealEstateRama) — The State of the Nation’s Housing 2015 report, released today, continues to show that the lowest income households in America struggle to finds homes they can afford. The report, issued by Harvard University’s Joint Center for Housing Studies, documents that homeownership rates were at a 20-year low in 2014, resulting in record growth in demand for rental homes, soaring rents, and record numbers of cost-burdened renters.
According to the report, the national rental vacancy rate dropped to 7.6% in 2014—the lowest in nearly 20 years. This has driven the cost of rents up by 3.2%, double the rate of overall inflation. Rental markets are tightest at the low end—the number of vacant units with rents under $800 plunged by 12% from the year before.
The report shows that although new rental units are being built, they are primarily at the high end of the market. The median asking rent of all new units was $1,290 in 2013—about half of the typical renter’s monthly income.
As a result, almost half of all renters were cost-burdened—spending more than 30% of their income on rent. Also, more than 1 out of 4 were “severely” cost burdened—spending more than 50% of their income on rent. The report noted that these cost-burdened renters “are forced to cut back on food, healthcare, and other critical expenses.”
While the report notes that cost burdens are “climbing the income scale,” the lowest income households by far have it the worst. In fact, over 80% of households with incomes under $15,000 (equivalent to full-time wage at the minimum wage) were cost-burdened in 2013. Excluding rental units that were structurally inadequate or occupied by higher-income households, there were only 34 affordable units available for every 100 extremely low income households in 2013. These renters are just one emergency away from homelessness. The lack of affordable rental housing in our country for extremely low income households is the reason America has such a shamefully high homelessness rate.
The report also notes that just 26% of eligible very low income households, those earning up to 50% of area median, received rental assistance from HUD or USDA in 2013. One-third of those who did receive assistance were seniors and one-third were working-age households that included someone with a disability. In 2013 the average annual income of a HUD-assisted household was about $12,900.
NLIHC concurs with Managing Director of the Harvard Joint Center for Housing Studies Chris Herbert’s conclusion: “There is a pressing need to prioritize the nation’s housing challenges in policy debates over the coming year if the country is to make progress toward the national goal of secure, decent, and affordable housing for all.”
The annual State of the Nation’s Housing report summarizes and analyzes recent trends and emerging issues in the nation’s housing markets, and discusses what might be expected in the coming year. The State of the Nation’s Housing 2015 is available at: http://www.jchs.harvard.edu/research/state_nations_housing
Established in 1974 by Cushing N. Dolbeare, the National Low income Housing Coalition is dedicated solely to achieving socially just public policy that assures people with the lowest income in the United States have affordable and decent homes.
Renee M. Willis
Vice President for Field and Communications
National Low Income Housing Coalition
1000 Vermont Avenue, NW, Suite 500, Washington DC 20005