WASHINGTON—According to Housing Landscape 2016, released today by the Center for Housing Policy at the National Housing Conference, more low- and moderate-working households are renting as opposed to owning their homes, with the share of households who rent increasing from 50.8 percent to 52.6 percent from 2011 to 2014.
Rents have increased as a result of heightened demand, with the median housing costs for renters rising by more than six percent since 2011. Working owners fared better, with a five percent decline in median housing costs over that same three-year period furthering a continued decline in the share of severely cost burdened working homeowners.
Demand for rental housing exacerbates the affordability problem
Working households are less likely to own their homes, due partly to the lingering effects of the foreclosure crisis, as well as the difficulties that many low- and moderate-income households have qualifying for a mortgage and saving enough money for a down payment.
“This increasing demand for rental housing puts upward pressure on market rents,” explained Vice President of Research Dr. Lisa Sturtevant. “High demand for rental housing and escalating rents prevent many working families from moving into homeownership, building wealth, and getting a foothold in the middle class.”
One in four working renter households is severely housing cost burdened
The report finds that the overall share of working households paying more than half their income for housing costs has declined modestly between 2011 and 2014 due primarily to the decline in the costs of homeownership , as well as modest increases in incomes over the three-year period. Still, housing affordability remains a major issue for a large number of working households, with renters bearing the greatest burden. In 2014, 24.2 percent of all renter households experienced severe housing cost burden, compared to 9.7 percent of all homeowners. The numbers are worse for low- and moderate-income working households: 25.1 percent of working renters and 16.2 percent of working homeowners were severely housing cost burdened in 2014.
“Working households are increasingly more likely to be renters rather than homeowners,” said Research Associate and report author Mindy Ault. “Even given increases in median household incomes, the lasting effects of the foreclosure crisis pushing working owners into the rental market, combined with rising rents, make it more difficult than ever for working households to save up enough to buy a home and begin building wealth.”
The report describes the policy implications of these findings and suggests both federal and local measures to expand affordable housing options for working households. Policies that address the importance of place, like the Choice Neighborhoods Program, are also vital to ensuring that families have access to opportunity, including good schools, transportation, employment, and affordable housing. And, in order to build wealth, working families need both affordable rental housing and better access to efficient forms of credit.
View the report online here.
About the National Housing Conference:
The National Housing Conference represents a diverse membership of housing stakeholders including tenant advocates, mortgage bankers, nonprofit and for-profit home builders, property managers, policy practitioners, Realtors®, equity investors, and more, all of whom share a commitment to safe, decent and affordable housing for all in America. We are the nation’s oldest housing advocacy organization, dedicated to the affordable housing mission since our founding in 1931. We are a nonpartisan, 501(c)3 nonprofit that brings together our broad-based membership to advocate on housing issues. Learn more at www.nhc.org.
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