JCHS Releases State of the Nation's Housing
Thursday, June 23, 2016
Posted by: Matthew Craig
Harvard's Joint Center for Housing Studies released it's 2016 State of the Nation's Housing yesterday, highlighting the outlook for both the homeownership and rental markets in the US. In positive news, the JCHS the housing market has now picked up enough momentum to be a driving factor of growth in the US economy. High demand for rentals are driving housing expansion while new construction of single-family homes is steadily rising, giving 2016 a positive outlook on housing. Additionally, income growth is showing signs of growing in the younger millennial generation, in particular, which will increase the purchasing power of the now largest generation in the US.
Thanks to the last decade of lack of economic growth, demand and construction of multi-family units is on the rise. The demand is large, but the new supply being constructed isn't necessarily aimed at those in the the most need of lower cost housing, as the median asking rental rate for these new constructed multi-family inits is $1,381 per month, putting it well out the range of most lower-income households, and 70% higher than the median monthly rate of the multi-family units, overall.
New home sales have been on the rise, increasing 14.6% in 2015, while existing home sales increased 6.3%. The sharp increase in sales has created a slight shortage in the inventory of homes, with supply falling to 4.8 months, which is the fourth straight year below the sweet spot of six month, often cited as the ideal supply for a balanced market. Bottom and mid-value tier unit inventories have been hit the hardest, dropping 38% in the last half decade, and dropped 9% in 2015 alone.
For more details and information, please visit the JCHS website to download the full report and key facts sheets.