U.S. Housing Market Slump Drags On as Home Prices, Rents Remain at Rec…
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작성자 보스톤 작성일 26-06-19 13:18본문
(Boston=Boston Korea) By Myungsul Jang = As the U.S. housing market remains mired in recession, the housing crisis for low-income families is worsening due to high home prices and rental costs.
According to the "State of the Nation's Housing 2026" report released on the 17th by Harvard University's Joint Center for Housing Studies, while housing transactions and new demand are slowing, housing cost burdens remain at all-time highs.
The report shows that existing home sales have not recovered from the 30-year low recorded in 2023. Existing home sales, which reached 6.1 million in 2021, have remained around 4 million annually for the past three years. New home sales also showed little change.
Housing demand itself is also weakening. Last year, U.S. household formation totaled 1.1 million households, a sharp decline from the annual average of 2 million during the COVID-19 pandemic. The growth rate of homeowner households also slowed by half, and the homeownership rate declined for two consecutive years.
The report analyzes that economic uncertainty is fueling the housing market slump. U.S. non-farm job growth plummeted from 1.5 million in 2024 to 116,000 last year. Consumer confidence has also dropped sharply since last year, falling in April of this year to levels lower than during the 2008 financial crisis and the COVID-19 pandemic, following the Iran conflict.
However, despite declining demand, the burden of housing costs has barely eased.
The median prices of both new and existing homes have exceeded $400,000. Existing home prices have risen 54% nationwide since 2020, and current home prices are about five times the median income, well above the typical 1990s level of three times.
High interest rates are also adding to the burden. With 30-year fixed mortgage rates remaining above 6%, monthly housing costs for purchasing a median-priced home have nearly doubled from $1,700 in early 2020 to around $3,100 at the end of last year. To afford these costs now requires an annual income of over $120,000, a significant increase from $66,000 in 2020.
While supply shortage issues are somewhat easing, the lack of affordable housing is actually worsening.
Over the past decade, rental housing supply growth has concentrated mostly on high-end properties. Seven million rental units priced under $1,000 per month have disappeared, most demolished or converted to more expensive housing. Available listings affordable to households earning under $75,000 annually have also decreased by 60% compared to 2019.
The burden on low-income families has been particularly severe.
Eighty-three percent of renter households earning under $30,000 annually were spending more than 30% of their income on housing costs. Notably, 66% of low-income households were found to be spending more than half their income on housing.
These households had an average of only $210 per month left for other living expenses such as groceries, medical care, and transportation after paying rent. This is nearly half the $410 available in 2019.
The report notes that several state and local governments have recently begun deregulating to expand housing supply. New Hampshire, Texas, and Florida are pursuing policies to expand housing supply, such as allowing multifamily housing construction in commercial zones, while the federal government is also pushing to expand the Low-Income Housing Tax Credit (LIHTC).
The report concludes: "While some positive movement toward expanding housing supply is emerging, much stronger policy support is needed to improve housing accessibility and affordability for low-income and middle-class households."
[email protected]
According to the "State of the Nation's Housing 2026" report released on the 17th by Harvard University's Joint Center for Housing Studies, while housing transactions and new demand are slowing, housing cost burdens remain at all-time highs.
The report shows that existing home sales have not recovered from the 30-year low recorded in 2023. Existing home sales, which reached 6.1 million in 2021, have remained around 4 million annually for the past three years. New home sales also showed little change.
Housing demand itself is also weakening. Last year, U.S. household formation totaled 1.1 million households, a sharp decline from the annual average of 2 million during the COVID-19 pandemic. The growth rate of homeowner households also slowed by half, and the homeownership rate declined for two consecutive years.
The report analyzes that economic uncertainty is fueling the housing market slump. U.S. non-farm job growth plummeted from 1.5 million in 2024 to 116,000 last year. Consumer confidence has also dropped sharply since last year, falling in April of this year to levels lower than during the 2008 financial crisis and the COVID-19 pandemic, following the Iran conflict.
However, despite declining demand, the burden of housing costs has barely eased.
The median prices of both new and existing homes have exceeded $400,000. Existing home prices have risen 54% nationwide since 2020, and current home prices are about five times the median income, well above the typical 1990s level of three times.
High interest rates are also adding to the burden. With 30-year fixed mortgage rates remaining above 6%, monthly housing costs for purchasing a median-priced home have nearly doubled from $1,700 in early 2020 to around $3,100 at the end of last year. To afford these costs now requires an annual income of over $120,000, a significant increase from $66,000 in 2020.
While supply shortage issues are somewhat easing, the lack of affordable housing is actually worsening.
Over the past decade, rental housing supply growth has concentrated mostly on high-end properties. Seven million rental units priced under $1,000 per month have disappeared, most demolished or converted to more expensive housing. Available listings affordable to households earning under $75,000 annually have also decreased by 60% compared to 2019.
The burden on low-income families has been particularly severe.
Eighty-three percent of renter households earning under $30,000 annually were spending more than 30% of their income on housing costs. Notably, 66% of low-income households were found to be spending more than half their income on housing.
These households had an average of only $210 per month left for other living expenses such as groceries, medical care, and transportation after paying rent. This is nearly half the $410 available in 2019.
The report notes that several state and local governments have recently begun deregulating to expand housing supply. New Hampshire, Texas, and Florida are pursuing policies to expand housing supply, such as allowing multifamily housing construction in commercial zones, while the federal government is also pushing to expand the Low-Income Housing Tax Credit (LIHTC).
The report concludes: "While some positive movement toward expanding housing supply is emerging, much stronger policy support is needed to improve housing accessibility and affordability for low-income and middle-class households."
[email protected]
Original Korean article: https://bostonkorea.com/bbs/board.php?bo_table=news&wr_id=46106
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