- 26 Jun
Harvard Report Displays Housing Affordability Issue
Harvard University recently released a national report on housing affordability, detailing their findings on home and rental trends. According to the report, almost 39 million U.S. residents are living in homes that they can’t afford, signalling an issue over affordability in today’s market, particularly in metropolitan areas such as Miami-Dade county. Miami was named as one of 11 areas in the U.S. where more than 40 percent of households were considered to be cost-burdened. A household was considered cost-burdened when 30 percent of the homeowners income was taken up by housing costs. This is mainly driven by a tightening supply coupled with a pickup in demand following the housing collapse in years prior.
The report also stated that apartment rentals may face even more difficulties within the Miami area. According to the report, 62 percent of Miami renters were considered cost-burdened. As well, approximately 35 percent of renters claimed to spend more than half their income on rent.
The problems detailed in the report stem from the fact that fewer residential units are being built within the United States. The past 10 years have seen the lowest amount of residential properties being built since the 1960s, and the constructions that are happening tend to cater towards a higher-end home instead of first-time buyers. This leads to many more apartment rentals, as seen by the 2016 national rental vacancy rate reaching the lowest numbers in 30 years. However, as with the new homes being built, apartment being constructed trend towards higher-end accommodations. Within Miami, a majority of the rental developments built in 2015 with 50 or more units were high-end apartments, and the average rent was approximately $2,100. Looking at longer trends, the number of units in Miami with a rental price of less than $800 per month declined in the past 10 years, while units renting for over $2,400 more than doubled. As houses increasingly raise in average price, and apartment construction focuses on higher-end units, the average homeowner may find it difficult to keep up with the rising costs of owning, or renting, a property.
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