Report: Housing market on the mend
Home construction has risen but is running near historic lows; homeownership is at its lowest rate in decades, and poor households face acute hardships finding a place they can afford, the annual State of the Nation’s Housing report concluded.
On a brighter note, however, foreclosures are way down, and a stronger job market is encouraging more young people to move out of Mom’s basement and set up their own households. That should boost home construction significantly over the next decade, helping to power up the nation’s economy, the report said.
Demand for rentals has driven the housing recovery, with more than 36 percent of households renting in 2015, the highest percentage since the 1960s, the report said. The number of renters rose by 9 million from 2005 to 2015, the largest 10-year increase on record, the report said. There are a number of reasons for this trend, including the wave of foreclosures that pushed many families out of homeownership, tighter credit standards that make it harder for households to buy, and a desire for more flexibility among higher-income households.
The percentage of renters facing a crushing cost burden is at record highs, the report said. Federal housing aid reaches only a quarter of those who qualify, “leaving nearly 14 million households to find housing in the private market where low-cost units are increasingly scarce,” the report said.
These families’ housing struggles seep into other areas of their lives, forcing them to spend less on food, health care, retirement savings and other necessities, the report said.
Since the recession, low-income households have been increasingly concentrated in high-poverty areas. In 2000, 6.5 million Americans lived in high-poverty neighborhood; in 2014, that number more than doubled, according to the report. That has long-term implications for children, who are more likely to attend college and have higher lifetime earnings if they live in more affluent areas, the report concluded.
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