A recent report from the Harvard JCHS takes a look at the important differences in the housing market since the 1980s.
Many staples of American life look different in the three decades since 1988, from big hair to the cost of college to the rising number of Americans burdened by housing costs.
In a recent report, The Harvard Joint Center for Housing Studies (JCHS) noted that the country has built more than 40 million housing units and added 27 million new households since then. The report, which analyzed how key housing metrics have changed over the timeframe, found that even though the overall national homeownership rate looked about the same then as compared to now, the number of cost-burdened households has increased by a worrying 14 million.
“By many metrics, the U.S. housing market in 2018 is on sound footing,” Chris Herbert, managing director of the center, said in a news release. “But a number of challenges highlighted in the first State of the Nation’s Housing report 30 years ago persist today.”
First, the good news. With the addition of new households since 1988, improved housing stock has replaced older homes, leading to higher quality accommodations across the country. Today’s typical American home is larger and more likely to have amenities like air conditioning and multiple bathrooms. Although it was difficult to find structurally inadequate housing 30 years ago, it’s even rarer to find it today.
But I’m not convinced the good outweighs the bad. And neither, it seems, is JCHS. Their findings illustrate a familiar story: the number of households with student loan debt has nearly doubled. Those obligations make it tougher for young adults to live independently and make the transition from renting to owning more difficult, with many often waiting until their 30s to purchase a home.
The gap between black and white homeownership is growing as well, with the percentage of black homeowners near 30-year lows. The gap currently sits at about 29.2 percentage points, a troubling disparity given that in 1983, the same margin was measured at 23.5 percentage points, and in that year the black homeownership rate was 2.6 percentage points higher than today.
On top of that, slow-growing wages for households in the bottom quartile haven’t kept up with rapidly rising home prices. Constraints in the supply of housing coupled with a growing lack of subsidies for low-income households lead to the report’s discovery that nearly a third of all households (38.1 million) paid more than 30 percent of their incomes — the often-used metric for affordability — for housing in 2016.
“We need strategies to help the private sector produce more moderately-priced housing,” Herbert added in the release. “Doing so will require new approaches for making effective use of public funding, reducing construction costs, and easing regulatory barriers.”