Today’s and Tomorrow’s
Housing Market:
Conditions, Needs, and Policy Choices
Chris Herbert
NCSHA Annual Conference
Boston, MA
October 21, 2014
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Rental Markets
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Renting Has Increased Sharply Across Most Age
Group Over the Last 10 Years
Age of Household Head
Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys.
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Generating a Surge in Renter Household Growth
Average Annual Growth in Renter Households (Millions)
Note: Renter growth in 2013 in the HVS was calculated by averaging the number of renters in the first and second
quarters of 2013 and subtracting the average number of renters in the first and second quarters of 2012.
Source: JCHS tabulations of US Census Bureau, Decennial Censuses, Current Population Surveys(CPS), and
Housing Vacancy Surveys(HVS).
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And a Strong Recovery in Multifamily Construction
While Single-Family Building Remains Depressed
Note: Levels shown are seasonally adjusted annual rates averaged over 12 months to reduce volatility.
Source: JCHS tabulations of US Census Bureau, New Residential Construction data.
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In Fact, Most of the Recent Increase in Rental
Supply Has Come from Single-Family Homes
Note: Other units include mobile homes, trailers, boats, recreational vehicles, and vans.
Source: US Census Bureau, 2006 and 2012 American Community Surveys.
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Supply Appears to be Catching Up With
Demand
Units (Thousands)
Notes: Data cover investment-grade multifamily properties. Completions and changes in occupied units are four-quarter totals.
Source: JCHS tabulations of MPF Research data.
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Strong Rental Demand Has Pushed Up Rents Even
as Renter Incomes Have Fallen Steadily
Percent Change in Real Median Value Since 2001
Notes: Values are adjusted for inflation by the CPI-U for All Items. Data exclude renters paying no cash rent.
Source: JCHS tabulations of US Census Bureau, American Community Surveys.
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Renter Cost Burdens Spread at an Unprecedented
Pace in the 2000s
Shares of Cost-Burdened Renter Households (Percent)
Notes: Moderate (severe) burdens are defined as housing costs of 30-50% (more than 50%) of household income.
Households with zero or negative income are assumed to be severely burdened, while renters not paying cash rent are
assumed to be unburdened.
Sources: JCHS tabulations of US Census Bureau, Decennial Census and American Community Surveys.
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Renter Cost Burdens Are Worse on the Coasts
But Very High in Markets Across the Country
Notes: Housing cost burdens are defined as housing costs of more than 30% of household income.
Households with zero or negative income are assumed to be burdened, while renters paying no cash rent
are assumed to be without burdens.
Source: JCHS tabulations of US Census Bureau, 2012 American Community Survey.
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Few Lowest Income Renters Escape Severe Burdens
As Problems Creep Up the Income Scale
Share of Renter Households (Percent)
Under
$15,000
$15,00029,999
$30,00044,999
$45,00074,999
$75,000
and Over
Notes: Moderate (severe) burdens are defined as housing costs of 30–50% (more than 50%) of household income. Households with
zero or negative income are assumed to be severely burdened, while renters not paying cash rent are assumed to be unburdened.
Source: JCHS tabulations of US Census Bureau, American Community Surveys.
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Very High Shares of Lowest Income Renters Are
Cost Burdened Everywhere, But Creep Up in the
Income Scale in High Cost Markets
Severely Cost Burdened Renters (Percent)
Notes: Severe cost burdens are defined as housing costs of more than 50% of household income. Households with zero or negative
income are assumed to be severely burdened, while renters not paying cash rent are assumed to be unburdened.
Source: JCHS tabulations of US Census Bureau, American Community Survey, 2012.
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Affordable Supply Gap For Extremely LowIncome Renters Continues to Widen
Note: Extremely low-income is defined as less than 30% of area median income.
Source: US Department of Housing and Urban Development, Worst Case Housing Needs Reports.
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As the Number of Very Low-Income Renters Has
Grown, the Likelihood of Getting Assistance Has Fallen
Very Low Income Renter Households (Millions)
Share with Assistance (Percent)
Note: Worst case housing needs are defined as renters with very low incomes (below half the median in their area) who do not receive government housing
assistance and who either paid more than half their monthly incomes for rent, lived in severely substandard conditions, or both.
Source: US Department of Housing and Urban Development, Worst Case Housing Needs Reports to Congress.
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Nearly Two Million Assisted Rentals Are
at Risk of Loss from the Affordable Stock
Notes: Other units include those with HOME Rental Assistance, FHA insurance, Section 202 Direct Loans, USDA Section 515 Rural Rental
Housing Loans, USDA Section 538 Guaranteed Rural Rental Housing Program, and State Housing Finance Agency Funded Section 236.
Data include properties with active subsidies as of May 16, 2014.
Source: National Housing Preservation Database.
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Tax Credits Are Key Hope for Preservation And
Necessary to Develop Rentals At More
Affordable Price Points
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Homeownership
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The Homeownership Rate Continues to Drift Downward
along with the Number of Owners
Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys.
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House Prices Continue to Recover, Having
Gained Back More than 60% of Their Losses
Single-family house price index (Jan. 2000=100)
Source: CoreLogic National House Price Index (HPI), Single family attached and detached structures as of July, 2014
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The Number of Underwater Properties Has Fallen
Substantially, But Remains High
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Residential Properties with Negative Equity (Millions)
12
10
8
6
4
2
0
Source: CoreLogic Equity Report, First Quarter 2014.
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Serious Delinquencies and Foreclosure Inventories
Have Been Cut in Half, But Still Well Above Normal
Source: JCHS tabulations of Mortgage Bankers Association, National Delinquency Surveys.
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Minority and Low-Income Neighborhoods Have Higher
Shares of Homeowners with Negative Equity
Share of Mortgaged Homes with Negative Equity (Percent)
Poverty Rate
Notes: Negative equity homes have mortgage balances that exceed current home values. Negative equity shares are averaged across
neighborhoods. Neighborhoods are defined by zip codes and include 11,572 areas with at least 500 residents and with data available from 2000 to
2013. Minority (mixed/white) neighborhoods were more than 50% (10–50%/less than 10%) minority in 2012. High- (moderate-/low-) poverty
neighborhoods had poverty rates of more than 20% (10–20%/ less than 10%) in 2012.
Source: JCHS tabulations of Zillow® Real Estate Research and US Census Bureau, 2008-2012 American Community Survey 5-Year estimates.
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Homeownership Remains an Important Source of
Wealth for Low-Income and Minority Households
Median Housing Wealth as a Share of Household Net Worth (Percent)
Notes: Data exclude renters and households with zero or negative income. Income quartiles are equal fourths of all households
ranked by income. White, black and other households are non-Hispanic; Hispanic households can be of any race.
Source: JCHS tabulations of Federal Reserve Board, 2010 Survey of Consumer Finances.
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And a Fundamental Goal of People at All Ages
Source: Drew and Herbert, 2012. Based on Fannie Mae National Housing Survey 2010-2012.
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Offering Some Hope for a Turnaround in
Homeownership, Mortgage Payments Remain
Affordable Relative to Rents
Real Monthly Housing Costs (2014:2 dollars)
Notes: Monthly mortgage payments based on median existing home price from NAR ® and assumes 20% downpayment and a 30-year fixed-rate
mortgage from Freddie Mac. The monthly gross rent is the median gross rent from the 2012 American Community Survey indexed to the Consumer Price
Index for Rent of Primary Residence. Both series are adjusted for inflation to 2014:2 dollars using the CPI-U for All Items.
Source: JCHS tabulations of Freddie Mac, Primary Mortgage Market Survey; National Association of Realtors ®, US Census Bureau, 2012 American
Community Survey; and US Bureau of Economic Analysis, Consumer Price Indices.
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But Access to Credit Has Tightened for Low
Credit Score Borrowers
Note: Loans with missing credit score data were excluded.
Source: JCHS tabulations of CoreLogic data.
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Declining Incomes Among Younger Households
Key Factor in Homeownership Trends
25–34 Year Olds
35–44 Year Olds
Note: Incomes are adjusted for inflation by the CPI-U for All Items.
Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys and Current Population Surveys.
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Student Loan Debt Burdens More Common, But Heavy
Burdens are Concentrated in a Few Borrowers
Percent with Debt
Median Debt ($000s)
Average Debt ($000s)
Note: Debt amounts are constant 2010 dollars.
Source: Joint Center tabulations of Survey of Consumer Finances.
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Minorities Account for Nearly Half of Younger
Households and Much of the Coming Growth
Age Under 30
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Substantial Gaps in Homeownership by Race and
Ethnicity Remain After Two Decades of Ups and Downs
Source: JCHS tabulations of US Census Bureau, Current Population Surveys.
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Renters Have Minimal Savings and Wealth So
Need Low Downpayment Loans
Cash Savings (Thousands of dollars)
Total Net Wealth (Thousands of dollars)
Notes: Data for Renters only. Cash savings includes checking, saving, CD and money market
accounts.
Source: JCHS tabulations of 2010 Survey of Consumer Finances.
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Median Credit Scores Vary by Race and Income,
So Credit Score Cutoffs Also Matter
Median credit score among all households, 2001
Source: Bostic, R., P. Calem and S. Wachter. (2003) Hitting the Wall: Credit as an Impediment to
Homeownership, November 13, Working Draft.
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Housing Older Americans
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The Older Population Is on Track to Increase
Dramatically
Population by Age Group (Millions)
Source: US Census Bureau, Decennial Censuses and 2012 National Population Projections (middle series).
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Households Owning Their Homes Outright Are Much
Less Likely to Be Cost Burdened
Share of Households by Age Group (Percent)
Source: JCHS tabulations of US Census Bureau, 2012 American Community Survey.
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Rapid Growth in Older Eligible Renters Will Put Even
More Pressure on Housing Assistance Programs
Very Low-Income Renter Households Aged 62 and Over (Millions)
Sources: JCHS tabulations of US Department of Housing and Urban Development, Worst Case Needs Reports to Congress, and JCHS 2013
Household Projections.
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By Age 80, Adults Are Far More Likely to Have Disabilities
than to Live in Accessible Homes
Shares of Housing Units and Population with Disabilities by Age Group (Percent)
Source: JCHS tabulations of US Department of Housing and Urban Development, 2011 American Housing Survey, and US Census Bureau, 2012
American Community Survey.
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Cost of Long-Term Services and Supports Are
Quite High—Out of Reach for Most Renters
Without Subsidies
Median Monthly Cost
Sources: 2014 Genworth Cost of Care Survey.
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