4 Key Takeaways for 2023
This year’s State of the Nation’s Housing 2023 report from Harvard University’s Joint Center for Housing Studies paints a stark picture of the housing affordability crisis, with record unaffordability, near-record housing shortages, and major barriers to first-time homeownership. Habitat for Humanity International co-sponsored the report through our Cost of Home campaign to help bring greater attention to these and other urgent housing challenges impacting the U.S. Below are four major takeaways from the report for Habitat’s work and the communities we serve:
1. Homeownership costs skyrocketed in 2022, pricing out 2.4 million renters.
According to Harvard’s JCHS, the housing affordability crisis deepened as the estimated housing payments — including mortgage, insurance, and property tax — needed to purchase a median-priced home in the U.S. reached $3,000 per month in March 2023. This surge in costs priced out 2.4 million more renters from homebuying compared to last year. The crisis disproportionately affected Black and Hispanic homebuyers, as the estimated annual income needed to afford median homeownership costs rose 20% to $117,000 — well above the national median income for renters.
2. Housing cost burdens reached their highest levels in years.
The housing affordability crisis led to a sharp rise in the number of homeowners and renters facing severe cost burdens. Housing cost burdens, defined as paying more than 30% of income on housing, escalated during the pandemic. By 2021, 19 million homeowners (22.7%) were cost burdened — the highest level since 2013. The crisis hit renters even harder, with 21.6 million households (49%) being cost-burdened, an all-time high.
3. The supply of homes for sale remains at near-record lows.
The housing affordability crisis is exacerbated by a severe shortage of homes for sale. By the end of 2022, the supply of single-family homes had only slightly improved from historic lows, remaining 30% lower than at the end of 2019. This shortage has intensified the affordability crisis, particularly for modest-income households and homebuyers of color.
4. States and localities are helping show the way forward.
In response to the housing affordability crisis, various states and localities have reformed zoning and housing regulations to facilitate the construction of affordable homes. These efforts aim to alleviate the crisis by reducing barriers to building and lowering housing costs. Initiatives such as Colorado’s new funding incentives and HUD’s PRO Housing program are key steps forward in addressing the housing affordability crisis at the local level.
Confronting the Housing Affordability Crisis
The State of the Nation’s Housing 2023 report underscores the urgent need to address the housing affordability crisis in the U.S. Through strategic reforms, increased public investment, and continued advocacy. There is hope for mitigating the crisis and expanding access to affordable homeownership.
Original article [Source: www.habitat.org]
