THE STATE OF THE NATION’S HOUSING 2023

JOINT CENTER FOR HOUSING

STUDIES OF HARVARD UNIVERSITY
THE STATE OF THE NATION’S HOUSING 2023
Joint Center for Housing Studies of Harvard University
Harvard Graduate School of Design | Harvard Kennedy School

TABLE OF CONTENTS
1. Executive Summary.............................................................. 1

2. Housing Markets..................................................................10

3. Demographic Drivers.......................................................18
Principal funding for this report was provided by the
Policy Advisory Board of the Joint Center for Housing
Studies. Additional support was provided by:

Federal Home Loan Banks

Habitat for Humanity International

0
4. Homeownership............................................................... 25 Housing Assistance Council

5. Rental Housing.................................................................... 32 MBA’s Research Institute for Housing America

National Apartment Association

6. Housing Challenges.........................................................39
National Association of Home Builders
7. Addtional Resources........................................................47
National Association of Housing and
Redevelopment Officials

ONLINE TABLES AND EXHIBITS National Association of REALTORS®

[Link] National Council of State Housing Agencies

National Housing Conference

National Housing Endowment

National League of Cities

National Low Income Housing Coalition

National Multifamily Housing Council

NeighborWorks America

©2023 by the President and Fellows of Harvard College.

The opinions expressed in The State of the Nation’s Housing 2023

do not necessarily represent the views of Harvard University or
the Policy Advisory Board of the Joint Center for Housing Studies.
01
EXECUTIVE SUMMARY

Housing markets continue to cool even as homeowners and renters face higher costs. On the for-sale
side, home sales and construction levels are declining, as is the pace of home price appreciation, while
rental markets are experiencing sharply reduced rent growth and rising vacancy rates. Nevertheless,
home prices and rents remain elevated from pre-pandemic levels. Millions of households are now priced
out of homeownership, grappling with housing cost burdens, or lacking shelter altogether, including a
disproportionate share of people of color, increasing the need for policies to address the national housing
shortfall at the root of the affordability crisis. Likewise, there is growing urgency for public and private
investment to address longstanding disinvestment in underserved communities of color, adapt the
housing stock to increasing risks of climate change, and expand options for older adults to age safely in
their communities.

Housing Markets Cool Rapidly Figure 1

Home Price and Apartment Rent Growth

In both the for-sale and rental markets, housing Continued Sharp Decline in Early 2023
demand softened and markets cooled by early Year-Over-Year Change (Percent)
2023 in response to rising interest rates and deteri- 25
orating affordability. In the for-sale market, season- 20
ally adjusted home prices declined month over
15
month in July 2022 for the first time in over a decade,
10
ticking down 2.8 percent by February 2023 from their
pandemic peak. On an annual basis, home prices 5

rose just 2.0 percent in February from the prior year, 0

down from 20.1 percent annual growth a year earlier. -5

Home prices fell year over year in 25 of the 100 largest -10
metro areas tracked by Freddie Mac, with the steepest
-15
declines in markets in the West and South, including 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Austin, Boise, and San Francisco.
Home Prices Apartment Rents

Notes: Asking rents are for professionally managed apartments

Asking rents nationally also rose year over year, though in buildings with five or more units. Home prices in 2023q1 reflect
the rate of growth has slowed considerably. Annual data for January and February only.
Source: JCHS tabulations of RealPage data; S&P CoreLogic Case-
rent growth for units in professionally managed apart- Shiller US National Home Price Index.
ments slowed from a record-high 15.3 percent in the
first quarter of 2022 to just 4.5 percent in the first quarter
of 2023 (Figure 1). Annual rent growth also slowed over

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 1
the past year in all 50 markets tracked by RealPage, in rents in many major cities, and a boost in savings.
including declines in two markets. Rent growth decel- Against this backdrop, millions of millennials in their
erated most rapidly in previously hot markets in the 20s and 30s were able to form new households and
West and South. For example, in Phoenix, rents declined financially distressed households were able to remain
1.9 percent in the first quarter of 2023 after rising 25.6 in their homes.
percent one year earlier, and in Tampa, rents rose just
3.4 percent after rising 27.6 percent the year before. There has been particularly strong growth among
homeowner households since the pandemic began,
Still, housing costs remain high relative to pre-pan- driven primarily by younger households able to take
demic levels. Between the beginning of 2020 and advantage of lower interest rates to fulfill aspirations
early 2023, asking rents in the professionally managed for homeownership that had been delayed by the
sector rose 23.9 percent. Similarly, nominal home Great Recession. Favorable buyer conditions lifted
prices rose an astounding 37.5 percent, helping to homeownership rates by 1.2 percentage points overall
push up the median sales price for existing homes since 2019 but by 2.2 percentage points among house-
from $283,000 just before the pandemic to $375,400 holds under age 35 and by 2.1 percentage points for
in March 2023. In the face of higher home prices, first- households ages 35–44. Consequently, the number
time homebuyers must save even more to afford the of homeowner households headed by an adult under
up-front and downpayment costs needed to secure age 45 grew by 10 percent in just three years between
a mortgage, and require ever-higher incomes for the 2019 and 2022.
ongoing payments.
Meanwhile, renter household growth slowed in 2022
In the near term, home prices are unlikely to return to following a brief mid-pandemic surge in late 2021. The
pre-pandemic levels, due largely to the low number slowdown has been most evident in professionally
of homes available for purchase. However, the run-up managed apartments, thanks in part to rising rents
in home prices during the pandemic has resulted in and the increased number of households with higher
record-high levels of home equity for existing home- incomes transitioning to homeownership.
owners. According to the Federal Reserve, homeowner
equity totaled $31.0 trillion in the fourth quarter of 2022, Looking forward, total household growth is likely to slow
$7.7 trillion higher than in the first quarter of 2020 after in the coming few years, in part because much of the
adjusting for inflation. On average, homeowners had pent-up demand for household formation among
$270,000 in equity, according to CoreLogic. young adults has been released, and also because
of deteriorating affordability and slowing population
growth, the primary long-term driver of household
Robust Household Growth growth. The oldest baby boomers are turning 77 this
Likely to Slow year and as they continue aging the death rate will
eventually exceed that of births, making immigration
Household growth surged to 1.9 million per year in the country’s main source of population growth. But,
2019–2022, fueled by the pandemic-induced need compared with natural growth, immigration is much
for space, the pause in federal student loan payments, less predictable.
various stimulus packages, the temporary decline

2 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
Higher Costs Push Homeownership millions of renter households were nonetheless priced
Out of Reach out of homeownership. Agency data provided by the
Urban Institute show a 22 percent annual decline in the
Homeownership rates were rising before the pandemic number of mortgages originated to first-time home-
and continued rising through it, powered by low interest buyers in 2022, including a year-over-year drop in the
rates and a jump in savings in 2020 and 2021. Nearly fourth quarter of nearly 40 percent.
1.5 million households joined the ranks of homeowners
between 2021 and 2022, lifting homeownership rates As the cost of homeownership rises, the prospect dims
by 0.3 percentage point to 65.8 percent, and by 2.4 for eliminating racial homeownership rate gaps, even
percentage points since the 2016 low. Notably, more after slight progress in recent years. Between 2019 and
than half—5.2 million—of the 9.1 million new home- 2022, gains in Black homeownership narrowed the
owner households created since 2016 were established historically large Black-white homeownership rate gap
in just the past three years. by 2 percentage points. However, these gains are in
jeopardy as increasing costs disproportionately price
However, homeownership growth of this magni- Black and Hispanic renters out of homeownership.
tude is unlikely to continue in 2023. First-time home- While the number of white renter households who could
buying plummeted in the second half of last year in afford payments on the US median-priced home fell by
response to sharply rising interest rates that have 30 percent between March of 2022 and March of 2023,
significantly increased the cost of homeownership. the number of Black and Hispanic renter households
Monthly payments on the US median-priced home, in this group dropped by 39 percent and 37 percent,
including taxes and insurance, shot up from $2,200 respectively. With Black and Hispanic homeowner-
in January 2022 to $3,100 in October after the annual ship rates still fully 28.6 and 25.8 percentage points
interest rate on 30-year fixed-rate mortgages jumped below white homeownership rates, policymakers and
from 3.4 percent to 6.9 percent (Figure 2). Median practitioners have a long way to go to reduce these
monthly payments then settled to $3,000 by March disparities. Higher costs make the job more difficult.
2023 as interest rates plateaued at 6.5 percent, but

Figure 2

Steeply Rising Rates Have Made Payments on the Median-Priced Home Much More Expensive
30-Year Mortgage Interest Rate (Percent) Monthly Mortgage Payment (Dollars)
8 3,200

7 2,800

6 2,400

5 2,000

4 1,600

3 1,200

2 800

1 400

0 0
2018 2019 2020 2021 2022 2023

30-Year Mortgage Interest Rate Monthly Mortgage Payment on US Median-Priced Home (Right scale)

Note: Monthly mortgage payments include principal, interest, taxes, and insurance (PITI) and assume a 3.5% downpayment on a
30-year fixed-rate loan, 0.85% mortgage insurance, 0.35% property insurance, and 1.15% property taxes.
Source: JCHS tabulations of Freddie Mac, Primary Mortgage Market Surveys; National Association of Realtors (NAR), Existing Home Sales.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 3
Single-Family Construction Slowing The construction slowdown in 2022 raised concerns
about the nation’s large and ongoing housing shortfall.
Single-family homebuilding declined significantly While estimates of the degree of the undersupply vary
last year as buyers reacted to sharply higher significantly, there is widespread agreement that new
borrowing costs. Single-family housing starts dropped supply has not kept pace with demand, compressing
10.8 percent in 2022, with the slowdown growing vacancy rates and limiting the supply of homes
more pronounced throughout the year. The annu- for sale. In March 2023, just 970,000 existing homes
alized rate of single-family housing starts averaged (including 860,000 single-family homes) were avail-
just 876,000 new units in the second half of the year, able for purchase, an uptick from the all-time inventory
down 23.2 percent from the same period the year lows reached during the pandemic but still 42 percent
before and well below the 1.0 million units averaged less than in 2019, when supply was already historically
since 1990 (Figure 3). low. Movement in both interest rates and the economy
will help determine whether single-family construction
The decline in new homebuilding is particularly acute rebounds in 2023. Either way, there remains an urgent
for lower-priced homes, due to rising construction need for more new single-family construction.
and land costs, limited lot availability, and regulatory
barriers like minimum lot sizes that restrict entry-level
Multifamily Construction Thriving
housing production. In 2021, just 24 percent of new
homes—or 236,000 units—were under 1,800 square Unlike single-family homebuilding, multifamily
feet, compared with 37 percent of new completions in construction continued to rise in 2022 even as rental
1999. Likewise, manufactured housing, often an even demand softened. Indeed, 547,000 new multifamily
more affordable option, totaled just 113,000 shipments units were started last year, the highest number since
in 2022. Although up from recent lows, manufactured the mid-1980s. Plus, fully 960,000 units in multifamily
home shipments regularly topped 200,000 units annu- buildings were under construction as of March 2023,
ally in the 1980s and 1990s. the highest number in half a century.

Figure 3

Single-Family Construction Dropped Dramatically, While Multifamily Development Remained Strong

Annualized Housing Starts (Thousands of units, seasonally adjusted)

2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Single-Family Multifamily Single-Family Historical Average Multifamily Historical Average

Note: Single-family and multifamily historical averages are of seasonally adjusted monthly data from January 1990 to March 2023.
Source: JCHS tabulations of US Census Bureau, New Residential Construction.

4 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
Meanwhile, rental vacancy rates are rising, which earning more than $72,000 assuming the 30 percent
suggests a forthcoming slowdown in multifamily of income affordability standard. Moreover, fully 36
construction when combined with higher interest rates, percent of newly completed multifamily units had
tightening lending standards, and weak developer asking rents of $2,050 or more, while just 5 percent had
sentiment. The overall rental vacancy rate climbed asking rents below $1,050, leaving renters with low and
to 6.4 percent in the first quarter of 2023 after falling moderate incomes to reckon with a stubbornly tight
to a four-decade low of 5.2 percent in late 2021. Like- supply of moderate- and lower-priced apartments.
wise, the vacancy rate for professionally managed
apartments has more than doubled from a record
Cost Burdens Reach Record Levels
low of 2.5 percent in 2022 to 5.2 percent in early 2023,
with vacancy rates highest for the highest-cost (Class Rising housing costs, coupled with pandemic-era
A) units, at 5.6 percent, and lowest for the lower-cost income losses, produced the most significant drop
(Class C) units, at 4.7 percent, suggesting the market in housing affordability in years, as seen in the most
for these units remained relatively tight. recent Census data. Between 2019 and 2021, the
number of cost-burdened renters—defined as those
Given that the bulk of new construction targets the spending more than 30 percent of their income on
higher-cost market segment, the robust pipeline of housing—increased by 1.2 million to a record 21.6
multifamily units may lead to additional vacancy million households (Figure 4). Among these, 11.6
rate increases that will simultaneously help to limit million were severely cost burdened, spending more
rent growth for high-cost units, while likely providing than 50 percent of their income on housing. Although
less relief to renters with lower incomes. According to the share of renter households with cost burdens
data from the Survey of Market Absorption, the median had been steadily declining in the past decade, the
asking rent for newly completed multifamily units in trend reversed during the pandemic. Between 2019
2022 was $1,800 and thus affordable only to households and 2021, the share of cost-burdened renters grew by

Figure 4

Number of Cost-Burdened Renters Reached an All-Time High in 2021

Cost-Burdened Renter Households (Millions)

22
20
18
16
14
12
10
8
6
4
2
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021

Severely Burdened Moderately Burdened

Notes: Moderately (severely) cost-burdened households spend more than 30% (more than 50%) of income on housing. Estimates for
2020 are omitted due to data collection issues experienced during the pandemic.
Source: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.

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2.6 percentage points to 49 percent of renter house- Residential Mobility Shifting
holds, approaching the 51 percent peak posted in 2011 Geography of Housing Demand
in the wake of the Great Recession.
Mobility patterns dominant during the pandemic
Likewise, the number of cost-burdened homeowners persisted in 2022, as people continued to move into
increased by 2.3 million to 19.0 million, including 8.7 lower-cost, lower-density areas. Social distancing put
million who were severely cost burdened in 2021. This a premium on living space and motivated moves to
increase upturned a years-long decline in the share less expensive suburban and rural areas. But as the
of home­owners with cost burdens and drove the cost- pandemic has eased, the share of people working from
burden rate up by 1.5 percentage points to nearly 23 home has remained elevated for many occupations,
percent of homeowners. In total, 40.6 million house- sustaining demand for housing in lower-cost areas.
holds were cost burdened in 2021, including 20.3 million
who were severely burdened. Urban counties in the nation’s largest metro areas saw
significant population outflows in 2022, though not
Predictably, cost burdens affect the vast majority of as severe as in 2021 and partially offset by increased
households with lower incomes, including 86 percent gains from immigration, which more than doubled
of those with incomes below $15,000 and 68 percent in these areas over the past year to the highest level
with incomes between $15,000 and $29,999. But, since 2016. Meanwhile, counties in suburbs and small
cost-burden rates are rising quickly among those metros gained population, largely thanks to an influx of
higher up the income scale, particularly among millennials at prime homebuying ages, many of whom
renters. Between 2019 and 2021, the share of cost- have flexible work arrangements and thus less need
burdened renters with incomes between $30,000 and to live near a large urban job center. Rural areas, too,
$44,999 increased 3 percentage points to 63 percent. continued a turnaround in demand and experienced
Meanwhile, the share of cost-burdened renters a second year of modest gains from domestic mobility
earning between $45,000 and $74,999 increased by 4 in 2022, with more than half of all rural counties (57
percentage points to 34 percent—the largest increase percent) recording more people moving in than out.
of any income group.
Longer-distance moves to states with warm climates
With such high housing costs, many households with and lower housing costs also remained high in 2022.
lower incomes may struggle to pay for other neces- Regionally, the South saw the largest net inflows, led
sities like food, clothes, and healthcare, which have by Texas, Florida, and North Carolina. Some moun-
become more expensive as inflation has risen. In 2021, tain states, including Montana and Wyoming, also
the median renter and homeowner households with recorded net gains in movers from other states. As
incomes under $30,000 had just $380 and $680 per such, domestic migration has become the largest
month, respectively, after paying for housing to cover source of population growth in 20 states and the
other necessities—the lowest residual incomes in largest source of population decline in 23 states.
two decades.

6 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
Unsheltered Homelessness Rises This rise in unsheltered homelessness underscores
the need to increase the supply of low-cost perma-
Despite the many pandemic-inflicted hardships, nent and supportive housing. While additional federal
overall homelessness remained relatively stable during resources are available to address homelessness
the crisis, according to the most recent point-in-time through the omnibus spending bill and the Amer-
count from the US Department of Housing and Urban ican Rescue Plan Act, appropriations for HUD rental
Development (HUD). The number of people experi- assistance and programs that increase the affordable
encing homelessness on a given night in January 2022 supply over the longer-term are currently insufficient
was 582,460, a 0.3 percent (2,000 people) increase to meet the scale of the challenge.
from 2020. That homelessness didn’t increase more
may indicate that government supports limited evic-
tions and provided emergency rental assistance. The Growing Need to Invest in the Existing
expiration of renter protections and the looming end of Housing Stock
rental assistance could leave more people unhoused.
In addition to expanding the supply of new homes,
While overall homelessness has remained steady so improving the existing housing supply is critical.
far, the top-line number masks a substantial wors- Substantial investment will be needed to preserve
ening of unsheltered homelessness, defined as the the aging stock and respond to climate change. At 43
number of people living in places not intended for years of age, the median home in 2021 was the oldest it
human habitation. In 2022, unsheltered homeless- has ever been, up from 27 in 1991. The Federal Reserve
ness hit 233,830, a 3.4 percent increase over two years Bank of Philadelphia estimates that the nation’s
(Figure 5). This reflects a longer-term trend, with the housing stock needs repairs amounting to $149 billion,
unsheltered population rising 35 percent (60,560 including $57 billion for homes occupied by house-
people) from 2015 to 2022. California, Washington, holds with lower incomes. This investment is partic-
Arizona, Oregon, and Texas had the largest increases ularly necessary for the 9.5 million homes that had
in unsheltered homelessness over this period. severe structural deficiencies or lacked basic features
like plumbing, electricity, water, and heat in 2021.
Figure 5

Unsheltered Homelessness Continued Rising in Further jeopardizing homes is the increasing damage
2022, Even as Fewer People Stayed in Shelters from climate-related disasters. CoreLogic estimates
People Experiencing Homelessness (Thousands) that more than 14.5 million homes were affected by
450 hazards in 2021, amounting to $57 billion in damage.
400 Even more homes are at potential risk, including 60
350
million units located in areas with at least moderate
300
250
expected annual losses. Federal programs that help
200 communities and households repair their homes after
150 disasters are crucial for minimizing losses in housing
100
50
stock. In 2022 alone, the Federal Emergency Manage-
0 ment Association (FEMA) provided $1.9 billion to 1.2
2010 2015 2020 2022
million households through its Individuals and House-
Unsheltered Sheltered
holds Program, defraying the cost of home repairs and
Notes: People experiencing sheltered homelessness are those
other recovery needs. Congress also appropriated
staying in emergency shelters, transitional housing programs, or
safe havens. People experiencing unsheltered homelessness are $10 billion of Community Development Block Grant
those whose primary nighttime location is a place not intended
for human habitation.
Source: JCHS tabulations of HUD, Annual Homeless Assessment
Report Point-in-Time Estimates.

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Disaster Recovery funds in 2021–2023 to help commu- Racial Segregation and Its
nities rebuild after disasters. While these recovery Consequences Persist
efforts are important, reduced development in high-
risk areas, improvements to the stock to mitigate future Racial segregation remains a persistent chal-
damage, and better awareness of risk will be needed lenge. Systemic racism and concentrated poverty
to adapt to climate change over the long term. have resulted in disinvestment in communities of
color, reducing access to quality public and private
Moreover, the housing stock requires modifications services and opportunities for financial security and
to mitigate its impact on climate change given that mobility, in turn furthering racial income inequities. As
homes are responsible for 20 percent of US green- a result, people of color are more likely to live in high-
house gas emissions. Recent federal efforts to reduce poverty neighborhoods, even if they have higher
housing’s contribution to greenhouse gas emissions incomes (Figure 6).
have been substantial. The 2022 Inflation Reduction
Act provided nearly $9 billion for energy-efficiency Exclusionary zoning contributes to this continued
and electrification rebates and extended the Resi- pattern of residential racial segregation. In many cities
dential Clean Energy Credit, which helps homeowners and suburbs, zoning favors single-family homes, which
offset the costs of renewable energy improvements. are typically owner-occupied and more expensive
A one-time $3.5 billion infusion into the Weatheriza- than multifamily options. This limits opportunities for
tion Assistance Program will further support energy- households and renters with lower incomes, many of
efficiency upgrades for households with lower incomes. whom are people of color. In an effort to address this
problem, Washington and Montana recently joined
California, Oregon, and Maine in passing legisla-
tion to allow more types of housing on land previ-
ously zoned exclusively for single-family homes.

Figure 6

Across Income Levels, People of Color Disproportionately Live in High-Poverty Areas

Share of Households Living in High-Poverty Census Tracts (Percent)
60

50

40

30

20

10

0
Black Native American Hispanic Asian White

Race/Ethnicity

Household Income Under $30,000 $30,000-74,999 $75,000 and Over

Notes: High-poverty census tracts are those where at least 20% of the population has incomes below the poverty line, as defined by the
official measure of poverty established by the Office of Management and Budget. Individuals in the white category are non-Hispanic.
Because Hispanic individuals may be of any race, some other racial categories overlap.
Source: JCHS tabulations of US Census Bureau, 2021 American Community Survey 5-Year Estimates.

8 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
The federal government is also encouraging commu- Meanwhile, multifamily construction has remained
nities to tackle restrictive land use through $85 million strong, with a record number of apartments under
in HUD grants that will help cities identify and imple- construction. However, most of this new housing supply
ment zoning reforms. targets renters with high incomes, and renters with
lower and moderate incomes will likely find little relief.
Equally critical to addressing racial inequities are Expanding the supply of modestly priced rentals would
investments designed to benefit residents of historically help alleviate this strain, although additional subsidies
underserved communities while avoiding fostering will be needed to make housing affordable for house-
gentrification and displacement. Fair housing plan- holds with the lowest incomes.
ning and enforcement are also needed. In 2023, HUD
proposed a new Affirmatively Furthering Fair Housing Additionally, investments are needed to help property
rule to fulfill the Fair Housing Act of 1968 requirement owners adapt the existing housing stock to climate
that the federal government address discrimination change. The federal government has made a major
and proactively promote inclusive communities. Under step in this direction by significantly expanding funding
the new rule, HUD grantees submit an equity plan every to support home improvements that increase energy
five years that identifies obstacles to fair housing and efficiency. However, to realize the full potential of this
concrete steps to overcome them. funding, state and federal agencies need the ability
to implement these programs effectively. The remod-
eling industry must also have the capacity to meet this
The Outlook
growing demand.
The sharp interest rate hikes over the past year
continue to impact housing markets and affordability Beyond the greening of the housing stock, it is impera-
for both homeowners and renters. Rising mortgage tive to facilitate investment in distressed communities,
costs have pushed homeownership out of reach for where home values often do not support remodeling or
millions of renters at a time when large numbers of new construction. Further investments are needed to
millennial households are at prime homebuying ages accommodate the nation’s rapidly growing population
and when homeownership disparities between white of older adults. Given that adults ages 75 and older will
households and those of color are near historic highs. be the fastest-growing segment of the population in
Higher interest rates have also sparked a slowdown the coming decade, there is an increasing need for
in the construction of new single-family homes, even housing that supports older adults who wish to safely
as a nationwide housing shortage contributes to high age in their communities.
housing costs.
In the face of ongoing debate about the need to
As long as housing remains prohibitively costly for pare back federal spending, now may not seem to
millions of would-be buyers, builders will struggle to be the right time to expand federal efforts to address
expand home production significantly. More lower-cost the nation’s housing challenges. But housing is a
housing is clearly needed, but expanding development crucial engine of economic growth, and investments
will require zoning reform to support a broader range in this important sector pay broader dividends. As
of housing types and investments in off-site construc- the pandemic highlighted, high-quality, stable, and
tion methods that could reduce development costs. affordable housing is foundational to widespread
Moving the needle on closing racial homeownership well-being and, as such, both merits and necessitates
gaps will also require policy interventions to reduce greater public attention.
the formidable financial barriers to homeownership.

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02
HOUSING MARKE TS

After reaching record highs during the pandemic, home price and rent growth have fallen through early
2023 as interest rates rose sharply, affordability worsened, and housing demand softened. In the for-sale
market, significantly fewer homes sold in 2022. Despite historically low levels of supply, single-family
homebuilding also declined. Likewise, in the professionally managed apartment market, the number of
renter households dropped and vacancy rates returned to pre-pandemic levels. Nevertheless, multifamily
development remained robust, with the number of units under construction the highest in half a century.

Decelerating Home Price Growth seventh consecutive month of declines following 124
months of growth, before ticking up slightly in February.
As mortgage interest rates rose sharply in 2022, the On an annual basis, home prices rose just 2.0 percent
for-sale housing market cooled rapidly, leading to a year over year in February, down sharply from their
decline in home prices. According to Center tabula- peak of 20.8 percent annual growth in March 2022
tions of the S&P CoreLogic Case-Shiller home price (Figure 7). After adjusting for inflation, real home prices
index, monthly home prices dipped 0.2 percent in declined 2.8 percent relative to the prior year. Late
January 2023 on a seasonally adjusted basis, the 2022 was the first decline in real home prices in over
a decade.
Figure 7

Despite Slowing Growth, Home Prices Remain Near Record Highs

Home Price Index Annual Change (Percent)
220 25

200 20

180 15

160 10

140 5

120 0

100 -5

80 -10
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Home Price Index Annual Change (Right scale)

Source: JCHS tabulations of S&P CoreLogic Case-Shiller US National Home Price Index.

10 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
This slowdown was felt in markets across the country. Persistent Shortage of For-Sale
Nominal home prices declined year over year in fully a Housing Contributes to Declining
quarter of the 100 large markets tracked by the Freddie
Home Sales
Mac House Price Index in March 2023, compared with
zero metros a year earlier. Prices dropped most sharply The number of homes available for sale remained near
in previously hot Western markets such as Boise, down historic lows in early 2023, driven by a decade-long
11.8 percent, and Austin, down 8.8 percent, and also fell slowdown in the construction of single-family housing
significantly in Northern California, where the lack of that preceded the pandemic, the growing population
affordability, a slumping tech sector, and the preva- of older adults who are less likely to move, and the lack
lence of remote work likely softened demand. While of available inventory for would-be sellers. According
prices rose in the remaining 75 markets, the rate of to the Housing Vacancy Survey, homeowner vacancy
increase slowed across the board. rates remained at 0.8 percent in the first quarter of
2023, tied for the lowest reading since data became
Despite this slowdown, prices continued to rise in most available in the mid-1950s, and under 1.0 percent for
markets. Knoxville was the lone market with double- the ninth consecutive quarter.
digit price growth—up 10.5 percent year over year in
March—as compared with all 100 metros a year earlier. Tight vacancies have meant limited options for poten-
On an annual basis, home prices rose most rapidly tial buyers. Just 970,000 existing homes were for sale
in the South, including Greensboro (8.8 percent), in March 2023, according to data from the National
Columbia (8.0 percent), and Charleston (7.8 percent). Association of Realtors, 42 percent less than March
Some Northeast and Midwest markets experienced 2019, when supply was already constrained (Figure 8).
similarly swift appreciation, including New Haven Nevertheless, this volume represents an uptick from the
(7.5 percent), Syracuse (7.1 percent), Youngstown (7.1 all-time lows experienced during the pandemic. The
percent), and Omaha (6.9 percent). months of supply—how long it would take all homes
on the market to sell at the current sales rate—also
Although national home prices have declined in the remained low. Just 2.6 months of inventory was avail-
past several months, they have risen astoundingly able in March, up from 2.0 months a year earlier but
when measured from the start of the pandemic. still down from the 3.8 months available in March
Between February 2020 and February 2023, nominal 2019 and far short of the 6.0 months that indicates a
home prices jumped a stunning 37.5 percent, or 17.5 balanced market.
percent after accounting for inflation. Over the longer
term, nominal home prices since 2010 have more than Inventories have remained low in part because many
doubled—rising 102.2 percent—while real home prices homeowners may be disinclined to move in the face
have climbed 51.5 percent. of rising interest rates. According to the FHFA National
Mortgage Database, nearly two-thirds of outstanding
That said, increased interest rates have also led to residential mortgages carry an interest rate of less
significantly higher monthly payments for potential than 4 percent, including one-quarter of mortgages
homebuyers, and demand has cooled in response. with interest rates below 3 percent—significantly lower
As long as interest rates remain elevated, home price than the 6–7 percent averaged on a 30-year fixed-rate
growth will likely continue to slow. But prices are unlikely mortgage in early 2023.
to plummet like they did during the Great Recession
thanks to the combination of the strong job market, the
continued aging of millennials into peak homebuying
years, the dearth of housing available for purchase,
and the low foreclosure rate.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 11
Figure 8

Supply of Homes for Sale Remained Near Record Lows in Early 2023
Existing Homes for Sale in March (Thousands) Months of Supply
3,500 14

3,000 12

2,500 10

2,000 8

1,500 6

1,000 4

500 2

0 0
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

Existing Homes for Sale in March Months of Supply (Right scale)

Notes: Months of supply measures how long it would take homes on the market to sell at the current rate. Six months is typically
considered a balanced market.
Source: JCHS tabulations of NAR, Existing Home Sales.

Consequently, the number of new listings continued to tabulations of data from the National Association
decline into early 2023, dropping 16 percent in the first of Realtors, existing home sales dropped 18 percent
quarter, according to [Link]. Instead, growth in in 2022 to 5.0 million, including a 17 percent decline
overall inventory has been due to homes remaining in single-family home sales, to 4.5 million, and a 23
on the market longer. On average, homes were on the percent decline in condo/co-op sales, to 546,000 units.
market for a median of 65 days in the first quarter of Sales of newly built single-family homes also fell. In
2023, up from 47 days the year before but far short of 2022, 641,000 new homes sold, down 17 percent from
the 81 days recorded in the first quarter of 2019. the year prior and well below the pandemic peak of
822,000 in 2020.
With such limited existing inventory, new construction
has become an increasingly large share of housing The slowdown in existing sales hastened throughout
available for purchase. In March 2023, 425,000 new 2022 as the effect of rising interest rates took hold.
single-family homes were available for sale, up just 5 Seasonally adjusted existing home sales declined just
percent from the year before but up 28 percent from 4 percent in the first quarter of 2022 relative to the first
the same period in 2019. New homes were about a third quarter one year earlier but 32 percent in the fourth
of single-family home inventory at the start of the year, quarter of that same year. In January 2023, the season-
nearing the all-time high set in 2022. ally adjusted rate of existing home sales was just 4.0
million units, down 37 percent from the year prior and
The constrained supply, along with rising interest the lowest since 2010. As interest rates stabilized in
rates and eroding affordability, contributed to a sharp early 2023, so, too, did the sales rate, which ticked up
decline in home sales last year. According to Center to 4.4 million units in March.

12 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
Investor Demand for Single-Family activity for renter households are still unfolding.
Homes Softens but Remains Strong On the one hand, large single-family rental operators
can provide higher value and potential cost savings
Investor activity in the housing market skyrocketed to renters through more professionalized property
during the pandemic as interest rates hit record lows management. Moreover, they might increase access
and home price and rent growth reached all-time to rental housing in a wider variety of neighborhoods,
highs. But, as interest rates rose in late 2022, investor including those typically less accessible to renters.
home purchases fell significantly. According to Core- On the other hand, research indicates that at least
Logic, purchases of single-family homes by investors some of these investors might more aggressively
who simultaneously owned three or more properties pursue evictions, and their activity is associated with
within the past 10 years declined by 25 percent year increased rents.
over year in the fourth quarter of 2022. Nevertheless,
investor purchases remained a high share of total
Cooling Rent Growth
sales because owner-occupant homebuying fell just
as sharply. Investors bought 26 percent of single- As in the for-sale market, a substantial drop in demand
family homes in the fourth quarter of 2022, just shy of in the second half of 2022 cooled rental markets.
the record-high 28 percent share recorded in early According to RealPage data, asking rents in the profes-
2022 and well above the 16 percent share averaged in sionally managed apartment sector have moderated
the three years immediately preceding the pandemic. significantly after rising 15.3 percent year over year
in the first quarter of 2022, an all-time high in data
Investor activity in the housing market can exacer- dating back more than 20 years. By the first quarter of
bate inventory shortages and limit homeownership 2023, rents rose 4.5 percent annually, just above the
opportunities for owner-occupant buyers by reducing 3.6 percent average annual growth between 2015 and
the available supply, especially in markets where 2019. But even with the slowdown, rents have risen a
investor activity is highest. According to CoreLogic, stunning 23.9 percent between the first quarter of 2020
investors purchased a third or more of single-family and the first quarter of 2023.
homes in Los Angeles, Memphis, and Salt Lake City,
among others, in the fourth quarter of last year. And in The slowdown in rent growth was evident across the
one 2007-2016 study of home sales in metro Atlanta, country. Asking rents in the first quarter of 2023 declined
large institutional investors accounted for up to three- outright year over year in two of the 50 large markets
quarters of annual single-family home sales in some consistently tracked by RealPage: Phoenix, down 1.9
neighborhoods. Investor activity in these neighbor- percent, and Las Vegas, down 1.0 percent . Asking rents
hoods was associated with a decline in homeowner- in both markets had risen about 25 percent annually in
ship for Black households in particular. early 2022. Though rents increased in the remaining 48
markets, the rate of rent growth slowed as compared
Likewise, investor activity influences the single- with a year earlier. Beyond previously hot markets in
family rental market. According to CoreLogic, about the West, rent growth moderated most precipitously
16 percent of investor purchases in the summer of in parts of Florida. Asking rents in West Palm Beach,
2022 were resold within six months, in line with histor- Tampa, and Fort Lauderdale each rose over 27 percent
ical averages. Many of the remaining homes were annually in the first quarter of 2022, but less than 6
likely rented to tenants, and the implications of this percent annually in the first quarter of 2023.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 13
Despite the widespread slowdown, rents still rose Unlike most other indicators, the pace of rent growth
substantially in some markets (Figure 9). Asking rents from the Consumer Price Index (CPI) continued to
rose 5 percent or more annually in 21 markets in the accelerate in early 2023, rising 8.8 percent annually
first quarter, still high but lower than last year, when in March 2023, double the growth rate a year earlier
they rose in all 50 markets. Rents increased the most and the highest rate in more than 40 years. This
year over year in Miami (9.5 percent) and growth was discrepancy relative to the sharp slowdown in gains
also strong in some of the more affordable markets among professionally managed apartments is partly
in the Midwest and Northeast, including Cincinnati explained by the CPI being a lagging indicator that
(8.2 percent), Newark (8.2 percent), and Indianapolis estimates rents for the entire rental stock. Rising rents
(7.7 percent). in the CPI show that many renters are still experiencing
substantial rent growth as old leases turn over and
Similar to apartment trends, rent growth for single- rents reset at higher levels, and is an important indi-
family homes cooled significantly from pandemic-era cator of inflation for the Federal Reserve to consider
record highs. According to CoreLogic, single-family when deciding the course of interest rate increases.
rents in March 2023 rose 4.3 percent year over year, However, the softening of other rent indicators suggest
still somewhat higher than the pre-pandemic rate that CPI rents will likely also slow in the future, which
though down from the 13.6 percent growth experienced would be good news for those hoping for relief from
a year earlier. today’s higher interest rates.

Figure 9

Across the Country, Rent Growth Slowed in Early 2023

Year-over-Year Change in Asking Rents (Percent)
30

25

20

15

10

-5
Phoenix San Diego Miami Atlanta Philadelphia Newark Cincinnati Minneapolis

West South Northeast Midwest

2022:1 2023:1

Notes: Asking rents are for professionally managed apartments in buildings with five or more units. Figure shows the markets in each
region with the lowest and highest annual change in asking rents in the first quarter of 2023.
Source: JCHS tabulations of RealPage data.

14 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
Rising Rental Vacancies higher than the year before and above the 4.8 percent
vacancy rate averaged in 2015–2019. Vacancy rate
New leasing traffic plunged in the second half of 2022, increases were widespread, rising year over year in the
according to data from RealPage, leading to the first first quarter of 2023 in 148 of the 150 markets tracked
drop in annual apartment demand since 2009 despite by RealPage, including 117 markets with increases of
high retention rates. Leasing then ticked up only slightly at least 2 percentage points.
in early 2023, as the professionally managed apart-
ment market added just 19,000 new renters on net in Nationally, vacancies remained lowest in less expen-
the first quarter—modestly reversing recent declines sive market segments, where less new supply is
but the weakest first quarter in a decade. As a result, coming online. The vacancy rate in more affordable
177,000 renters left the market on net over the past year, Class C apartments was just 4.7 percent in the first
following a 698,000 increase one year earlier amid the quarter of 2023, lower than the 5.6 percent vacancy
pandemic surge (Figure 10). rate in higher-quality Class A apartments. Likewise,
vacancies in the broader rental market ticked up in
The decline in leasing, combined with new construc- the first quarter, but remained near the decades-low
tion focusing on the high end of the market, pushed set during the pandemic. According to Center tabu-
apartment vacancy rates back to recent norms. After lations of the Housing Vacancy Survey, 6.4 percent of
falling to a record-low 2.5 percent in the first quarter all rental units were vacant in the first quarter of 2023,
of 2022, vacancy rates in the professionally managed up 0.6 percentage point from a year earlier. Still, such
apartment sector have subsequently increased every low vacancy rates have not been recorded since the
quarter. By the first quarter of 2023, vacancy rates had mid-1980s, aside from the pandemic and one reading
climbed to 5.2 percent, a full 2.7 percentage points at the end of 2019.

Figure 10

Demand for Professionally Managed Apartments Fell Sharply into Early 2023
Annual Change in Occupied Rental Units (Thousands)
800
700
600
500
400
300
200
100
0
-100
-200
2012 2014 2016 2018 2020 2022

Note: Data are for professionally managed apartment buildings with five or more units.
Source: JCHS tabulations of RealPage data.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 15
Slowing New Construction sented 37 percent of new units as recently as 1999.
Manufactured housing, with an average sales price in
In both the for-sale and rental markets, significant 2022 of just $127,000 excluding land, provides a more
amounts of new construction are required to alleviate affordable alternative to site-built housing. However,
the supply shortages. However, housing production just 113,000 manufactured homes shipped in 2022. By
declined modestly in 2022, driven by a sharp slowdown comparison, annual manufactured home production
in single-family homebuilding. The number of newly averaged 247,000 units in the 1980s and 302,000 units
started housing units fell from 1.60 million in 2021 to in the 1990s.
1.55 million in 2022, a small but significant 3.0 percent
decline in the context of the nation’s housing shortfall. In contrast, the multifamily construction sector was
Similarly, the number of permitted units declined 4.1 extraordinarily resilient in 2022. The number of multi-
percent to 1.67 million in 2022. However, in the near family starts rose 15.5 percent from an already-high
term, more supply is coming online as the number of 474,000 units in 2021 to 547,000 units in 2022—the
housing units completed continued to rise 3.7 percent highest level since 1986. The seasonally adjusted rate
to 1.39 million units last year. of multifamily starts remained strong throughout the
year, averaging 540,000–550,000 units in both the first
In the single-family market, construction dropped and the second halves of the year.
precipitously in 2022, after climbing to the highest level
in 15 years in 2021. Just 1.01 million single-family homes The number of multifamily units under construction
were started last year, down 10.8 percent from a year continues to reach new heights, driven by the strong
earlier. The decline in construction was much starker in multifamily sector and the growing time required to
the second half of the year, as interest rate increases complete such units as the costs of building mate-
took hold. From January through June 2022, the rials rise and larger urban-infill apartments dominate
seasonally adjusted, annualized rate of single-family production. Of the nearly 1.7 million housing units under
housing starts was 1.13 million units, up 1.7 percent on construction in March 2023, fully 960,000 were in multi-
average from the previous year. But from July through family structures (Figure 11). This number represents
December 2022, the rate of single-family starts was an increase from 818,000 units a year earlier and is the
just 876,000 units, down 23.2 percent, and remained highest rate of multifamily units under construction in
at an 830,000-unit pace in the first quarter of 2023. almost 50 years.

Most new units target the high end of the market. Given the glut of apartments under construction
The median sales price for newly built single- and rising vacancies in the professionally managed
family homes was $457,800 in 2022, up an inflation- apartment sector, multifamily construction is likely
adjusted 23 percent since 2019. Likewise, the to moderate going forward. Already, the Federal
production of smaller, typically less expensive, single- Reserve Board’s Senior Loan Officer Opinion Survey
family units remains historically low. In 2021, just on Bank Lending Practices reported tighter lending
236,000 homes under 1,800 square feet were built, less standards and weaker demand for multifamily loans
than a quarter of all single-family home completions. and commercial real estate construction loans.
By comparison, smaller single-family homes repre-

16 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
Figure 11

Construction Pipeline Hovers Near Record High in Early 2023, Fueled by Multifamily Development
Annualized Units Under Construction (Thousands, seasonally adjusted)
1,800

1,600

1,400

1,200

1,000

800

600

400

200

0
1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020

Total Single-Family Multifamily

Source: JCHS tabulations of US Census Bureau, New Residential Construction.

The Outlook Encouragingly, measures of homebuilder sentiment

have rebounded strongly in recent months. Still,
The for-sale and rental markets will likely continue changes in interest rates are key, and persistently
to moderate through 2023. On the for-sale side, the higher rates would remain a significant drag on
significant rise in interest rates over the past year has new construction.
more than offset the decline in home price growth,
keeping homebuyer costs high and cooling demand. In the rental market, slowing rent growth and rising
Additionally, homeowners with lower interest rates vacancies, especially in high-cost market segments,
will be reluctant to sell their homes, holding back will likely lead to a slowdown in new apartment
inventory growth. construction. But even as the abundance of mostly
high-end apartment units under construction
In a market with such limited homebuying options, reaches the market, it remains unclear how much
more new construction is needed to provide potential relief this will provide for households with low and
buyers with options at a variety of price points and moderate incomes.
to address the long-term undersupply of housing.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 17
03
DEMOGRAPHIC DRIVERS

Household growth remained high in 2022, driven largely by a surge in millennial household formation
pent up since the Great Recession. However, the drivers of household growth are now likely receding,
leaving record-low levels of population growth that will slow household growth going forward. Mean-
while, wide regional variation in housing affordability, combined with a rise in remote work, is spurring
domestic migration, in turn shifting the geography of housing demand. As the US population ages and
diversifies, the need to ensure equitable access to high-quality, affordable housing and communities
becomes even more urgent.

Rapid Household Growth Continues Figure 12

but Slowing Ahead Household Growth Slowed in 2022 but Remained

Above Pre-Pandemic Levels
Despite rising housing costs and growing economic Average Annual Growth in Households (Thousands)
uncertainty, the number of US households grew by 1.6 2,000
million in 2022, continuing a period of strong house- 1,800

hold growth that started in 2017 (Figure 12). This recent 1,600
1,400
surge has been driven by high rates of new house-
1,200
hold formation among millennials. Though the rate
1,000
of millennial household formation started to recover 800
before the pandemic, the financial conditions in late 600
2020 and 2021, including the federal stimulus and the 400

suspension of student loan payments, helped young 200

0
adults to afford to live on their own, particularly many 2011- 2013- 2015- 2017- 2019- 2021-
2013 2015 2017 2019 2021 2022
older millennials forced to postpone independent
living since the Great Recession. Growth in households Source: JCHS tabulations of US Census Bureau, Housing
headed by people ages 35–44 more than doubled Vacancy Surveys.

from 210,000 per year in 2017–2019 to 560,000 per year

in 2019–2022. In combination with a steady increase young adults who head their own households—also
in the number of older households, this acceleration called the headship rate—has recovered much of the
in younger household growth helped to push overall ground lost in the decade following the Great Reces-
US household growth to the highest levels in decades. sion, indicating that there is little room for these rates
to rise higher. Because this pent-up demand has been
Nevertheless, the household growth rate in 2022 largely satisfied, household growth will likely slow going
represents a slowdown from the 2.0 million annual forward, fueled by native population growth, which is
average between 2019 and 2021, and likely signals at a near-record low, and immigration, which is inher-
that the recent surge is waning. Likewise, the share of ently mired in politics and therefore is unpredictable.

18 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
Historically Low Population Growth birth and mortality rates. Until recently, natural growth
has been the primary source of population growth in
Population growth is the primary long-term driver of the US.
household growth and remains historically low. Overall,
the US population grew by 1.26 million people in 2022, or Throughout the 2000s and early 2010s, natural growth
just 0.38 percent. While this represents a slight uptick gradually slowed from 1.7 million to 1.4 million per year
from previous years—population growth hit 100-year while net gains from immigration fluctuated between
lows in 2019 and again in both 2020 and 2021—it is 800,000 and 1.2 million. Then, in the late 2010s, both
nevertheless a meager growth rate when compared natural growth and immigration plummeted, with
with the 2.8 million annual average (0.94 percent) annual gains from immigration ultimately dipping
in the 2000s. In fact, if not for the 0.35 percent rate of below 400,000 and natural growth dropping to less
growth in 2020 and the 0.16 percent growth rate in than 150,000 in 2021. At last measure in 2022, annual
2021, the 2022 growth rate would have marked a new gains from immigration rebounded to 1.0 million
100-year low. while annual gains from natural growth remained
a modest 245,000 (Figure 13), highlighting both how
Population growth is generated by either “natural” quickly immigration can change and the persistence
growth—the net of births minus deaths—or immigra- of the slowdown in natural growth. Indeed, deaths
tion. Gains from immigration can be fickle because are projected to outnumber births beginning in 2043,
they are subject to unpredictable policy changes and according to the Congressional Budget Office, at which
economic cycles in the US as well as other countries. point population growth will rely entirely upon immi-
Natural growth, on the other hand, is more predict- gration. Recent estimates suggest we may reach that
able because it is driven by slow-moving factors like point much sooner.

Figure 13

Population Growth Still Near Record Lows in 2022, Despite a Rebound in Immigration
Annual Population Change (Millions)
2.5

2.0

1.5

1.0

0.5

0.0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Natural Population Change Net Immigration

Note: Natural population change is the difference between births and deaths.
Source: JCHS tabulations of US Census Bureau, Population Estimates Program.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 19
Population and Household Growth Angeles metro, and 35 percent in the New York City
Depending on Immigration metro. As a significant driver of household growth,
immigrants are a large source of new housing demand.
While immigration has recently emerged as the
primary source of population growth nationwide, it Immigrants constitute an extremely racially and
has long been the largest driver in many areas across economically diverse demographic. Overall, 43
the country. In 2022, immigration was the largest percent of immigrant householders are Hispanic, 26
source of population growth for 26 states and nearly percent are Asian, 19 percent are white, and 10 percent
a third (29 percent) of all counties (Figure 14), and has are Black. And while high shares of immigrant workers
helped stabilize declining populations in both small are have low levels of education, increasing numbers
rural counties and large urban counties experiencing are highly educated. Among recent immigrants who
net domestic outmigration of native-born residents. have entered the country since 2016, 20 percent of
foreign-born adults ages 25 and older lack a high
Growth in immigrant-headed households accounted school education, in contrast to 7 percent of native-
for more than a third (35 percent) of all household born adults. However, 47 percent of immigrants have
growth between 2002 and 2022, raising the share of a bachelor’s degree or higher, compared with just 35
households headed by an immigrant from 14 percent percent of native-born adults. Unsurprisingly, immi-
in 2002 to 17 percent in 2022. Immigrants make up even grants with more skills and education generally earn
higher shares of households in some states, repre- higher incomes and are better positioned to form new
senting 33 percent—fully one-third—of households in households, buy homes, and afford different areas
California, 27 percent in New Jersey, and 21 percent in than their counterparts with less income, illustrating
Texas. Immigrants also headed large shares of house- the need for more diverse housing options to meet
holds in select metro areas, including 48 percent of the full range of housing demand from immigrants.
households in the Miami metro, 40 percent in the Los

Figure 14

Immigration Was the Largest Source of Population Growth in Nearly a Third of Counties in 2022
Largest Component of County
Population Growth, 2021-2022
Immigration
Domestic Migration
Natural Change
All Negative

Notes: Natural population change is the difference between births and deaths. “All negative” means that each component of population
change was negative in 2021–2022.
Source: JCHS tabulations of US Census Bureau, 2022 Population Estimates Program.

20 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
Residential Mobility and the Shifting lation gains from domestic migration, reversing the
Geography of Housing Demand pre-pandemic trend of decline. Gains occurred in a
majority of these rural counties (57 percent), a rare
As the rate of population growth slows, domestic event in decades of net urbanization.
migration will become a more important driver of
household growth and housing demand. Already, Some of this shift in geography, particularly the
domestic migration was the largest source of popula- increase in moves to smaller metros and rural areas,
tion growth in 20 states and in the majority of counties may be related to the pandemic-fueled rise in remote
that experienced growth in 2022. work. Between 2019 and 2021, the share of the workforce
reporting that they usually worked from home tripled
Suburbs, rural areas, and smaller metros—most of from 6 percent to 18 percent. Among younger workers
which have relatively more affordable home prices— ages 25–34, rates of working from home more than
are attracting a growing number of residents, while quadrupled from 4 percent to 18 percent. Given that
many larger, higher-cost urban areas are losing resi- younger adults have the highest mobility rates and
dents. Some of this shift has been accelerated by the that remote workers were more likely than commuters
pandemic-induced opportunity to work remotely, to move, the increase in working from home among
but longer-term changes in housing affordability, the younger workers likely contributed greatly to the recent
age distribution of the population, and a host of other rise in interstate mobility. In 2021, fully 29 percent of
factors that predate the pandemic are also helping householders ages 25–34 who worked from home had
to change the places people are moving to and from. moved in the past year, compared with 21 percent of
commuters of the same ages.
On a regional scale, states in the South and Moun-
Figure 15
tain West gained population from interstate moves in
2022, with Florida, Texas, and North and South Carolina Moves from Core Counties to Smaller and Rural
posting high net inflows, as was the case before the Markets Accelerated During the Pandemic
pandemic. Further mimicking pre-pandemic trends, Net Domestic Migration (Thousands)
California, New York, and Illinois saw the largest number
600
of net moves out of state. The biggest difference in 2022
400
relative to 2019 is that in 2022, the population gains in
200
Southern states grew larger, while losses increased
0
in states along the Pacific coast and in the Northeast.
-200
For example, the population gains from net moves
-400
into Florida more than doubled, from 139,000 in 2019
-600
to 319,000 in 2022, while population losses from net
-800
moves out of California jumped over 50 percent, from
-1,000
208,000 in 2019 to 340,000 in 2022.
-1,200
Large Metro Large Metro All Other Non-Metro
Core Non-Core Metros Areas
Similarly, county-level migration patterns remained
County Location
consistent, though they were generally larger in
2019 2020 2021 2022
magnitude than before the pandemic (Figure 15).
Urban counties in large metros with populations over Notes: Large metro areas have at least 1 million residents. Core
counties contain either the largest city in the metro area or any city
1 million lost more people from moves in 2022 than in with at least 250,000 residents. Non-core counties are all other
2019, while counties in smaller metros gained more counties in large metro areas.
Source: JCHS tabulations of US Census Bureau, Population
people. Meanwhile, nonmetro counties posted popu- Estimates Program.

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That said, surveys continue to show that, on net, inter- US Households Growing Older and
state and intercounty mobility rates at best only inched Increasingly Diverse
upward in 2022. And, within-county moves—which
account for the vast majority of household moves— Rapid growth in the older adult population is shifting
continued to decline as they have for decades. In all, the age composition of US households. Thanks to the
since 2010 the share of households moving outside baby boomers, the number of householders ages 65
their county each year has held at roughly 3.4–3.9 and older grew by nearly 40 percent between 2012
percent, with the interstate component hovering and 2022 to a whopping 35 million households. Fully
between 1.9 percent and 2.4 percent. Meanwhile, 27 percent of all households—and a third of all home-
the share of households moving within their county owner households—are now headed by someone
dropped by nearly half, from 8.3 percent in 2010 to age 65 or older. And with the oldest baby boomers
4.8 percent in 2022. This decline in local mobility having turned 75 in 2021, the highest rates of growth are
results in fewer homes available for sale or rent and shifting to the oldest age groups, who have substan-
less spending on pre- and post-move renovations, tially greater accessibility needs (Figure 16). There
furnishings, and other services, and has shrunk the has been a parallel increase in smaller households,
overall residential mobility rate. According to Current such as older single-person households and married
Population Survey data, the total share of households couples living alone. As more of the older adult popu-
that reported having moved in the past 12 months— lation chooses to age in the community, demand is
local or otherwise—fell from 11.9 percent in 2010 to 9.8 increasing for smaller housing, accessibility features
percent in 2019 and then again to 8.8 percent in 2022. such as single-floor living, and services delivered to
the home. At the same time, increases in multigen-
erational households are driving interest in flexible
housing designs spacious enough to accommodate
larger family households.

Figure 16

Older Adults Are Increasingly Driving Household Growth

Change in Households (Millions)
4

-1

-2
Under 25 25–29 30–34 35–39 40–44 45–49 50–54 55–59 60–64 65–69 70–74 75 and Over

Age of Household Head

2002-2012 2012-2022

Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys.

22 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
Meanwhile, the millennial generation—the largest Income and Wealth Inequality Persist
generation in history—is aging into prime childbearing
years, increasing the need for larger units affordable Incomes have grown significantly in the past decade.
to younger families. Over the past decade, the number According to 2022 Current Population Survey data, real
of households headed by someone ages 25–44 median household income rose from $60,200 in 2011
increased by 10 percent—3.7 million households— to $70,200 in 2021, with particularly large gains among
helping to grow the number of young family house- people of color, helping to reduce racial inequalities.
holds with children after a decade of decline. That said, During this period, median incomes rose 28 percent
this generation is also large enough to increase the among Asian households, 26 percent among Hispanic
number of smaller households, too, as their lower rates households, and 25 percent among Black households,
of marriage and childbearing are growing the numbers as compared with 18 percent among white house-
of young single-person households and unmarried holds. Nevertheless, enormous racial income dispar-
childless partner households. ities persist. At last measure, the median income for
white households was $78,000, which was 35 percent
Additionally, new, younger households are helping higher than the $57,900 median for Hispanic house-
to make US households more racially and ethnically holds and 62 percent higher than the $48,100 median
diverse. As of 2022, while 35 percent of all house- for Black households. Only Asian households, with a
holds were headed by a person of color, up from just median income of $101,000 in 2021, had incomes that
25 percent in 2000, people of color accounted for 44 exceeded white households.
percent of households ages 25–34 and 42 percent of
households ages 35–44, as compared with 35 percent Households with low incomes, which are dispropor-
of households ages 45–64, and 24 percent of house- tionately headed by people of color, are more likely to
holds ages 65 and older. People of color accounted be disadvantaged in housing markets because they
for about 85 percent of household growth over the are more likely to be cost burdened, less likely to live
past 10 years, including 42 percent of total household in opportunity-rich neighborhoods, and less likely to
growth from Hispanic households, 18 percent from meet the income and downpayment requirements
Black households, and 25 percent from Asian house- for homeownership. Against this backdrop, it is easy
holds or households of another race. Going forward, to draw a line from long-standing income inequality
people of color are expected to drive the majority of to even more dramatic and entrenched racial wealth
both population and household growth, while the older disparities. According to the latest Survey of Consumer
households lost will primarily be white. Finances from 2019, the median net wealth for white
households was $189,100, more than five times the
This increasing diversity has numerous potential impli- $36,000 median for Hispanic households, nearly eight
cations for housing markets. While people of color times the $24,100 median for Black households, and
head households of all income levels, larger shares over two and a half times the $74,500 median for
of households headed by people of color are lower households of all other races, including Asian.
income. Consequently, the need for more affordable
housing options in a broad range of communities will
only grow, as will the need to ensure fair access to
these units and neighborhoods.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 23
These wealth disparities both reflect and perpetuate will once again become the main driver of household
homeownership disparities. Home equity is often the growth, as has been the case for decades. However,
largest source of household wealth but, at the same population growth is at a near-record low, with little
time, the lack of wealth in the form of a downpayment sign of recovery on the horizon. Birth rates are declining
is commonly the greatest barrier to homeownership. and mortality rates are rising, consistent with the
Black and Hispanic renters had a median of just $800 aging of the enormous generation of baby boomers,
and $1,000 in cash savings, respectively, less than many of whom are in their mid-70s. Consequently, low
half the $2,200 reported for white renters, and well population growth is likely for the foreseeable future,
below the amount needed for a down payment on a leading to both a reduction in household growth and
modestly priced home in most areas. an increased reliance on international and domestic
migration to fuel new household formations.
Growing inequality in wealth also contributes to the
ability of households with higher incomes to bid up Looking to the future, one of the primary drivers of
overall housing costs and exacerbates housing afford- domestic migration, and in turn the geography of
ability challenges. Data show that the median wealth housing demand, will be remote work, and here trends
of households in the top income quartile grew by 27 are still evolving. Some workers are returning to the
percent between 2010 and 2019, to $627,000, while the office, others are continuing to work from home, and
median wealth of households in the bottom income still others are employing some combination of the
quartile grew just 10 percent to $10,700, making it that two. Regardless, it is clear that the aging and growing
much easier for those with more—and that much diversity of the population, coupled with some workers’
harder for those with less—to secure housing. increasingly flexible work options, will change the
shape of housing demand and necessitate housing
adaptations. These include additional options for older
The Outlook households seeking to remain in their communities
and homes in a broad range of communities and at
The pandemic era of rapid household growth, fueled a broad range of price points for a diverse array of
by the release of pent-up demand from millennials households of all ages, races, and income groups.
to form their own households, appears to be nearing Further, in the face of persistent and growing racial
an end as headship rates among most age groups wealth and income disparities, the need for safe,
have recovered much of the losses incurred since the affordable housing for households with lower incomes
Great Recession. Going forward, population growth and households of color is ever more urgent.

24 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
04
HOMEOWNERSHIP

Homeownership has become much more expensive in the wake of last year’s sharp rise in interest rates.
While the homeownership rate increased in 2022, by the end of the year the higher costs appeared to be
taking a toll as the rate of homeownership growth slowed. Meanwhile, many homeowners thrived, with
home equity levels hitting new highs and delinquency and foreclosure rates remaining low. That said,
aggregate data may somewhat mask the distress experienced by more financially vulnerable home-
owners, underscoring the continued and urgent need to reduce the nation’s gaping racial homeownership
disparities and expand access to affordable homeownership among people of color, especially in light
of the increased cost of homebuying.

High Costs of Homeownership Price an-priced home—assuming a 30-year mortgage and

a 3.5 percent downpayment—were $2,300, with prop-
Out Many Potential Buyers
erty taxes and insurance costs boosting it to $3,000
Despite softening prices and week-to-week volatility per month. Assuming an underwriting model in which
in mortgage interest rates in early 2023, the costs of all debt is capped at 43 percent of monthly house-
homeownership remain significantly higher than a hold income, of which non-housing debt payments
year ago, pricing many potential buyers out of the account for 12 percent and mortgage, insurance,
market. Between March of 2022 and March of 2023, the and tax payments are capped at 31 percent, the
annual interest rate on a 30-year fixed-rate mortgage
jumped from an average of 4.2 percent to an average
Figure 17
of 6.5 percent, a level not seen since 2008.
Higher Interest Rates Eroded Affordability over
the Past Year
Meanwhile, home prices have started to decline,
March March Percent
though not nearly enough to counteract the impact 2022 2023 Change
of increased interest rates on costs. In March 2023, Interest Rate (Percent) 4.2 6.5 +57
the US median existing home price was $375,400, Median Home Price (Dollars) 379,300 375,400 -1
down 1.0 percent year over year and 9.3 percent from
Downpayment & Closing Costs 24,700 24,400 -1
its mid-2022 peak. Nevertheless, monthly mortgage
Monthly Mortgage Payment 1,780 2,300 +29
payments on the median-priced home in March
2023 were up by 20 percent, or more than $500 Total Monthly Owner Costs 2,500 3,000 +20

higher than in March 2022, due to the rise in interest Required Annual Income 97,400 117,100 +20
rates (Figure 17).
Note: Estimates assume a 3.5% downpayment on a 30-year
fixed-rate loan, 0.85% mortgage insurance, 0.35% property
These increased costs have left millions of house- insurance, 1.15% property taxes, 3% closing costs, and a
holds unable to afford to buy a home. As of March maximum 31% debt-to-income ratio.
Source: JCHS tabulations of Freddie Mac, Primary Mortgage
2023, monthly mortgage payments on the US medi- Market Surveys; NAR, Existing Home Sales.

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annual income needed to afford payments on the In a growing number of metros, these rising costs
median-priced home rose over the past year by 20 pushed homebuying out of reach for all households
percent from $97,400 to $117,100. As a result, the number but those with the highest incomes. From the first
of renter households able to afford these higher quarter of 2022 to the first quarter of 2023, the share of
payments shrunk by 32 percent, from 7.5 million to metros requiring an annual income of at least $100,000
5.1 million, a loss of 2.4 million potential homebuyers. to afford payments on the median-priced home more
than doubled, from 16 percent to 38 percent. Whereas
Because interest rates increased nationwide, last year, home prices in the typical metro required an
would-be homebuyers in every corner of the country annual income of $67,000 for payments to be afford-
felt these increased costs, although the scale varied able, a year later the required income has jumped
by market. In the 177 metros whose median home to $86,000.
prices are reported by the National Association of
Realtors, monthly payments on the median-priced
Homeowner Cost Burdens Skyrocket
home were up anywhere from 4 percent to 44 percent
year over year in the first quarter of 2023—between As homebuyer affordability has deteriorated, cost
$50 and $1,400 per month—depending on the metro, burdens among current homeowners have climbed
with a median increase of 28 percent, or $500. sharply. Between 2019 and 2021, the number of home-
Notably, costs rose even where home prices them- owners spending more than 30 percent of their income
selves declined, such as in the San Francisco metro on housing costs jumped by 2.3 million households, the
area. There, the monthly payment on a 30-year fixed- largest increase in cost-burdened homeowners since
rate mortgage for a median-priced home increased 8 the height of the housing boom in 2005–2007 (Figure
percent—$630 per month—between the first quarters 18). As a result, 19.0 million homeowner households,
of 2022 and 2023, even as the median single-family or 22.7 percent, were burdened by monthly housing
home price in the area dipped 14.5 percent. costs in 2021, of which 8.7 million (10.4 percent of all
homeowners) had housing costs that exceeded 50
percent of their income.

Figure 18

Number of Cost-Burdened Homeowners Rose Sharply in 2021, a First Since the Mid-2000s
Cost-Burdened Homeowner Households (Millions)

24
22
20
18
16
14
12
10
8
6
4
2
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Severely Burdened Moderately Burdened

Notes: Moderately (severely) cost-burdened households spend more than 30% (more than 50%) of income on housing. Estimates for
2020 are omitted due to data collection issues experienced during the pandemic.
Source: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.

26 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
Over half of the increase in cost-burdened home- Homeownership Rates Climb
owners between 2019 and 2021 was among households
with the lowest incomes, earning less than $30,000 Despite rising costs, the number of homeowner house-
annually. As a result, the cost-burden rate among holds rose in 2022, though at a slower pace than in
this group of homeowners grew 3.2 percentage points previous years. Housing Vacancy Survey data show
between 2019 and 2021, to 68.6 percent. Furthermore, the number of homeowner households increased by 1.5
nearly all of the increase was for households with million between 2021 and 2022, slower than the rapid 1.9
severe burdens. By 2021, 49.2 percent of the 12.2 million million average annual growth rate observed between
homeowner households with incomes below $30,000 2019 and 2021 but still greater than the rate heading
were affected. into the pandemic (Figure 19).

Homeowners with low incomes were only one of the Consequently, the Housing Vacancy Survey indicates
many vulnerable populations whose burden rates the US homeownership rate grew to 65.8 percent
increased between 2019 and 2021. Cost burdens in 2022, up from 65.5 percent a year earlier and
affected a quarter of all homeowners age 65 and continuing the six years of consecutive homeown-
over (26 percent) and more than a third of all single- ership growth started in the aftermath of the Great
person (39 percent) and single-parent (36 percent) Recession, after rates bottomed out at 63.4 percent
homeowner households in 2021. Additionally, burdens in 2016. Younger households were the primary drivers
reached nearly a third of all Black (31 percent) and of the increase. For households under age 35, home-
Hispanic (29 percent) homeowners and more than a ownership rates rose by 0.8 percent in 2021–2022 to
quarter (26 percent) of Asian homeowners, compared 39.0 percent, and have now risen 2.3 percentage points
with one in five white homeowners (21 percent). Such since 2019. Likewise, homeownership rates for those
high rates of burden leave many homeowners strug- ages 35–44 also increased, up 2.1 percentage points
gling to pay for other monthly necessities and acutely since 2019, to 62.2 percent, as more millennials entered
vulnerable to sudden losses of income, urgent home the market after experiencing financial constraints
repairs, or other financial shocks. during the Great Recession that forced them to
delay homeownership.
Figure 19

Growth in Homeowner Households Continued to Lift Homeownership Rates in 2022

Homeowner Households (Millions) Homeownership Rate (Percent)
85 70
83 69
81 68
79 67
77 66
75 65
73 64
71 63
69 62
67 61
65 60
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Homeowner Households Homeownership Rate (Right scale)

Note: Estimates for 2020 are omitted due to data collection issues experienced during the pandemic.
Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 27
The overall homeownership rate has been further owners in Florida to a loss of $21,400 for homeowners
boosted by the nation’s aging population. Older adults in Idaho. Nationwide, however, just 2.2 percent of all
have the highest homeownership rates of any age mortgaged properties faced negative equity in the
group, with 79 percent of households ages 65 and fourth quarter of 2022, far below the 26 percent peak
older owning a home in 2022. While homeownership at the height of the mortgage crisis in 2009. That said,
rates for older households have remained relatively if home prices continue to fall, more owners could be
stable, hovering between 78.5 and 80.0 percent since pushed into having negative equity positions, partic-
2016, their share of households rose from 24 percent ularly first-time buyers who purchased their home
to 27 percent during that period and has helped to lift near their peak price.
the overall homeownership rate.
Nevertheless, these huge variations in equity high-
However, there are signs that the increase in home- light the critical role homeownership plays in wealth
ownership is slowing. For one, the number of home inequality, not simply between homeowners and
purchases by first-time homebuyers is rapidly renters, the most commonly cited disparity, but also
declining. Agency data from the Urban Institute among homeowners, particularly as home equity
show that the number of purchase loans originated relates to the racial wealth gap. Recent research has
to first-time homebuyers decreased 22 percent in shown that appraisals have undervalued homes
2022. Furthermore, declines accelerated through the owned by Black households or in predominantly Black
year such that, by the fourth quarter, lending to first- neighborhoods, translating directly into less home
time homebuyers was down nearly 40 percent rela- equity for Black homeowners compared with white
tive to a year earlier. Unless this trend is reversed in homeowners. Overall, at last measure in 2019, median
the near future, declines will most likely continue into home equity held by white homeowners ($130,000)
2023, with even fewer households reaping the benefits was nearly twice that of Black homeowners ($66,800)
of homeownership. and more than a third higher than that of Hispanic
homeowners ($95,000).

Home Equity Reaches Record Levels

Figure 20
While rising home values have added to the challenges
for first-time buyers, they have been a boon for existing Home Equity Has Reached Unprecedented
homeowners. According to the Federal Reserve, home- Heights as Mortgage Debt Holds Steady
owner equity in the US totaled $31.0 trillion in the fourth Trillions of 2022 Dollars
quarter of 2022, up 33 percent ($7.7 trillion) in real terms 35
since the start of the pandemic (Figure 20). Despite 30
declining home prices, aggregate equity remains up 25
$3.5 trillion year over year nominally and is nearly 2.5 20
times the aggregate mortgage debt.
15

10
CoreLogic reports that the average homeowner had
5
$270,000 in equity in their home as of the fourth quarter
0
of 2022, having gained $14,300 in equity over the past 1998 2002 2006 2010 2014 2018 2022
year and fully $95,900 over the past three years. But Aggregate Home Equity Aggregate Mortgage Debt
there are significant geographic variations that follow
the trends in home prices. Changes in equity from Note: Homeowner equity and mortgage debt are adjusted for
inflation using the CPI-U for All Items Less Shelter.
the fourth quarter of 2021 to the fourth quarter of 2022 Source: JCHS tabulations of US Federal Reserve Board, Financial
ranged from an average gain of $49,000 for home- Accounts of the United States.

28 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
Mortgage Delinquencies and are more likely to have lower incomes, and are also
much more likely to be behind on payments. Overall,
Foreclosures Remain Below 13.0 percent of homeowners earning less than $25,000
Pre-Pandemic Levels reported being behind on housing payments, along
Despite ongoing affordability pressures, federal assis- with 9.8 percent of homeowner households earning
tance and a resilient labor market have helped mort- between $25,000 and $50,000, versus less than 4
gage loan performance remain strong through early percent of homeowners earning $75,000 or more.
2023. At last measure from Black Knight in March, the While the bulk of the Homeowner Assistance Fund
overall delinquency rate was 2.92 percent, down from remains unobligated and thus will be able to assist
3.37 percent a year earlier, backed by declines in both some distressed homeowners, more resources will
short- and long-term mortgage delinquencies. Like- be needed to help homeowners after the fund is fully
wise, just 32,200 new foreclosure actions were started committed.
that month—5.6 percent fewer than a year ago. In all,
both foreclosures and delinquencies remained below
Racial Homeownership Gaps Persist
pre-pandemic levels.
Despite Recent Progress
Some of these low levels may be attributable to federal As gains in homeownership slow, so do prospects for
assistance. For example, the $9.9 billion Homeowner reducing racial disparities in homeownership rates.
Assistance Fund has helped more than 241,000 home- On the one hand, pandemic-era increases in home-
owners pay mortgage, utility, and home insurance ownership were widespread by race and ethnicity, and
bills since it was established as part of the American resulted in some progress toward narrowing racial
Rescue Plan Act of 2021. And, though it was feared that homeownership gaps. In fact, homeownership rates
the expiration of the CARES Act forbearance period for Black and Hispanic households rose 3.1 percentage
would lead to a wave of foreclosures, current data points and 1.2 percentage points, respectively, between
indicate that this is not the case. Overall, 86 percent 2019 and 2022, outpacing the 1.1 percentage point
of the 8.5 million loans given forbearances during the increase for white households.
pandemic have exited and are performing or paid off.
Only 422,000 loans remain in active forbearance, and On the other hand, Black households’ pandemic-era
they are exiting at a pace of roughly 100,000 per month. homeownership gains may be at least partially a
product of the low Black homeownership rate before
Nevertheless, these low overall rates of serious delin- the pandemic. While Black homeownership rates have
quency conceal higher levels of distress among increased modestly since the eve of the pandemic
homeowners. Fully 576,000 loans that have exited the in 2019, rates for Black households were then near
forbearance program are either delinquent or in loss their lowest levels in decades. This was due at least in
mitigation, while an additional 105,000 loans are in part to the fact that Black households did not share
active foreclosure or liquidation following their forbear- equally in the economic recovery experienced by
ance plan exit, as of April 2023. This financial distress white and Hispanic households after homeowner-
disproportionately impacts households with low ship rates bottomed out in 2016. And so, while the low
incomes and people of color. According to the Census interest rates of 2020 and 2021 helped Black home-
Bureau’s Household Pulse Survey, rates of missed ownership rates to begin to catch up, the progress
payments for Black (10.3 percent), Asian (10.1 percent), was only incremental.
and Hispanic homeowners (7.9 percent) were each
well above the share reported by white homeowners Despite these recent gains, the homeownership rate
(3.8 percent) in late 2022. Racial income inequality for Black households, at 45.9 percent, remains a full
plays a role in these disparities, as households of color 28.6 percentage points below the white rate of 74.4

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 29
Figure 21
Incomes are not the only barrier to homeownership for
Despite the Recent Rise in Homeownership Rates, people of color. Even among households earning over
Large Disparities Persist by Race and Ethnicity 120 percent of the median household income for their
Homeownership Rate (Percent) area, just 71 percent of Black households and 72 percent
80 of Hispanic households own homes, compared with
75 85 percent of white households. Generations of racist
70 housing, labor, and education practices have placed
65 households of color at a disadvantage in terms of
60 generational wealth, access to credit, access to high-
55 quality housing and neighborhoods, and other factors
50 that continue to be reflected in today’s households
45 and markets. As such, reducing racial homeownership
40 gaps is critical to inclusive economic growth for both
1998 2001 2004 2007 2010 2013 2016 2019 2022
households and communities and an important policy
Race/Ethnicity
issue, to ensure not only the health of housing markets,
White Black Hispanic Asian or Another
but also that of local economies and of the nation.
Notes: Householders who are white, Black, and Asian or another
race are non-Hispanic. Hispanic householders may be of any race.
Source: JCHS tabulations of US Census Bureau, Housing
Vacancy Surveys. Increasing Access to Affordable
Homeownership

percent. Meanwhile, the white-Hispanic homeown- In recent years, various programs and policies have
ership rate gap is nearly as large at 25.8 percentage been introduced to advance homeownership among
points, with the Hispanic homeownership rate at 48.6 people of color. For example, a growing number of
percent (Figure 21). for-profit and nonprofit lenders now offer targeted
downpayment assistance programs to help eligible
Nor are these disparities on track to shrink. High home applicants meet lending requirements, a frequent
prices and relatively high interest rates over the past barrier to homeownership for many households of
year have disproportionately priced out Black and color that may lack the generational wealth of many
Hispanic renter households, who have lower average white homebuyers. Some such programs are created
incomes, from homebuying. Based on the income as special purpose credit programs, which are able
requirements alone, the number of Black renter house- to target households of color as an economically
holds able to afford the median-priced home in the US disadvantaged class of persons under the 1974 Equal
dropped by 39 percent, while the number of Hispanic Credit Opportunity Act. Many programs instead target
renter households dropped by 37 percent. Meanwhile, specific neighborhoods or metropolitan areas that
the number of white renter households dropped by 30 have racially diverse populations. Notably, these
percent. While each of these decreases represents a programs are not limited to downpayment assistance
significant decline in access to homeownership, the and may also offer favorable mortgage terms and
outsized decrease for Black and Hispanic households more flexible underwriting criteria to further facilitate
works against efforts to reduce racial homeownership access to affordable and sustainable homeownership.
rate gaps.

30 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
Credit score minimums are a second significant Indeed, efforts to increase homeownership cannot
barrier to homeownership for many people of color, be limited to financial products. To truly provide equi-
who have disproportionately high rates of low credit table access to homeownership, concerted efforts are
scores or lack of credit history. In response, Fannie needed to reduce the cost and increase the supply
Mae and Freddie Mac now provide a new tool for of homes available for first-time buyers. Manufac-
lenders to assess credit quality by offering the option tured housing is an affordable path to homeownership
to consider a prospective borrower’s record on a wider that is underutilized in most of the country and could
set of monthly service payments that are not usually be encouraged by reducing zoning limitations and
included in credit histories, such as rent payments. by providing owners of manufactured homes better
Credit bureaus such as Experian are also working with access to lower-cost mortgage products like those
some rental management companies, utility compa- available to site-built homes. Other general reforms
nies, and even streaming services to enable renters to of zoning laws, regulatory restrictions, approval
incorporate on-time payment of monthly rent or utility processes, and development fees could help to drive
bills into credit scores. down production prices on the types of more afford-
able homes that buyers want and need. Lastly, along
Other barriers to homeownership are due to the with the production of new units, policy needs to help
economics of mortgage lending. Because lenders’ preserve the affordable owner-occupied stock to
fixed costs on mortgage loans are the same regard- prevent losing properties to disrepair as the housing
less of the loan size, lenders are incentivized against stock ages.
making smaller loans. However, in distressed housing
markets, as well as in many rural areas where the
typical home price can be less than $70,000, low-bal-
The Outlook
ance mortgages and additional specialized lending Over the coming year, overall higher housing costs
programs are needed to accommodate lower home will continue to make access to homeownership a
prices and expand homebuying opportunities. challenge. That said, interest rates have plateaued
and home prices have declined modestly in much
Another area where policy action is needed is the cost of the nation since mid-2022, allowing buyers time
of financing, which can push homeownership out of to adjust to these new conditions. Homeownership
reach for households with lower incomes. Over the past demand persists, evidenced by the rise in loan appli-
year, the Federal Housing Finance Agency eliminated cations that has accompanied every dip in interest
up-front fees on loans made to first-time borrowers rates in recent months. Against this backdrop, poli-
with lower incomes and those in underserved commu- cymakers and practitioners will need to continue to
nities. These changes are intended to expand access adapt homeownership programs to improve access to
to mortgage financing and reduce monthly costs affordable homeownership; address the racial dispar-
for homebuyers while still reflecting the relative risks ities in income, wealth, and access to credit that fuel
of different categories of borrowers. While these are the nation’s racial homeownership rate gaps; and
helpful and necessary steps, more is needed to over- increase the housing supply to satisfy anticipated
come the many barriers to homeownership. demand from future buyers. Additionally, policies for
distressed homeowners are needed to stave off poten-
tial harms when the next economic downturn arrives.

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05
RENTAL HOUSING

A drop-off in demand is cooling the formerly heated rental markets. Rental vacancy rates are climbing
from historic lows, and rent growth is slowing from last year’s all-time high. Nonetheless, rents are still
rising, the supply of low-rent units is falling, and new construction is adding primarily to the high-end
rental stock. In response, renter cost burdens have risen to their highest recorded level, underscoring the
worsening affordability challenges facing many renters with lower incomes.

Slowing Demand for Rental Units holds grew by 1.0 million between the first quarter of
2020 and the first quarter of 2022, an implied annual
Rental demand declined in early 2023. According to average increase of 510,000 renter households. The
the Housing Vacancy Survey, the number of renter recent drop-off in the number of renter households,
households decreased by 158,000 between the first coupled with robust growth in the number of home-
quarter of 2022 and the first quarter of 2023. The recent owner households, fueled a continued downward trend
decline came after a surge in rental demand early in rentership rates from a peak of 36.6 percent in 2016
in the pandemic, when the number of renter house- to 34.2 percent in 2022, with 43.9 million households
renting their housing in 2022 (Figure 22).

Figure 22

Rentership Rates Declined as Renter Household Growth Slowed in 2022

Renter Households (Millions) Rentership Rate (Percent)
45 37
44 36
43 35
42 34
41 33
40 32
39 31
38 30
37 29
36 28
35 27
34 26
33 25
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021 2022
Renter Households Rentership Rate (Right scale)

Note: Estimates for 2020 are omitted due to data collection issues experienced during the pandemic.
Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys.

32 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
The decline was even sharper in early 2023, particu- Softening Rental Markets Cool
larly for professionally managed apartments, which Multifamily Investor Demand
account for about a quarter of the total rental stock
and primarily serve households with higher incomes. Slowing rent growth, combined with rising vacancies,
According to data from RealPage, the net number interest rates, and operating costs, has hurt multifamily
of occupied apartments within the professionally property performance through early 2023. In the first
managed segment dropped by 177,000 between quarter of 2023, the rental vacancy rate increased to
the first quarter of 2022 and the first quarter of 2023. 6.4 percent, up from its lowest level in decades (5.6
This drop-off in apartment demand marked a sharp percent) in the fourth quarter of 2021, according to the
reversal from the surge in the first quarter of 2022, when Housing Vacancy Survey. Meanwhile, the vacancy rate
the net number of occupied apartments increased by in the professionally managed apartment segment
a record-breaking 698,000 units annually. increased even more dramatically, reaching 5.2
percent in early 2023, according to data from Real-
Several factors have contributed to the recent drop-off Page, nearly 3 percentage points above its record-low
in rental demand. Many renter households with higher reading of 2.5 percent in the second quarter of 2022.
incomes transitioned to homeownership during the
pandemic-era homebuying boom. Further, demand The pace of rent growth has slowed remarkably over
may simply be normalizing after the temporary surge the past year, though rates of increase remain above
in rental household formations that happened when pre-pandemic averages (Figure 23). Between the first
restrictions were lifted. Lastly, high inflation rates, quarter of 2022 and the first quarter of 2023, rents for
rapidly rising rents, and economic uncertainty may units in professionally managed apartments were up
have presented additional barriers to household by just 4.5 percent—well below the record-high annual
formation, either disincentivizing or simply preventing rate of 15.3 percent one year earlier at the height of the
some individuals from moving out of homes shared pandemic-era surge, but nearly a percentage point
with family or roommates to form new households. above the 3.6 percent rate averaged in the five years

Figure 23

Despite Slowing Rent Growth, Rent Increases Remain Above Pre-Pandemic Levels
Annual Change in Rents (Percent)

20

15

10

-5
2015 2016 2017 2018 2019 2020 2021 2022 2023

All Apartments Class A Class B Class C

Notes: Asking rents are for professionally managed apartments in buildings with five or more units. Class A (Class C) apartments are
relatively higher (lower) quality.
Source: RealPage.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 33
leading up to the pandemic. This slowdown in the pace Non-individual ownership has grown across all prop-
of rent growth occurred across property classes. Rents erty types, especially for small and midsized multi-
for higher-cost Class A units, which increased at a family properties. Between 2001 and 2021, the share
rapid annual rate of 18.5 percent in the first quarter of of 2- to 4-unit multifamily properties owned by non-
2022, grew by just 4.8 percent in early 2023. Rent growth individual investors increased by 17 percentage
for lower-cost Class B and Class C units also deceler- points to about a third of properties while the share
ated but remained slightly higher than pre-pandemic of properties with 5 to 24 units owned by non-
averages. Rents for Class B apartments grew by 4.2 individual investors increased by 32 percentage points
percent annually in early 2023, down from a peak of to about two-thirds of properties. Meanwhile, the share
16.1 percent, and rents for Class C apartments grew by of single-family rental properties owned by non-
4.6 percent, down from a peak of 9.5 percent. individual investors increased by 8 percentage points,
reaching 25 percent in 2021. In contrast, non-individual
Cooling market conditions along with increased oper- investors owned 93 percent of rental properties with
ating costs have reduced multifamily investment at least 50 units in 2021.
activity. Indeed, rising costs of labor, maintenance
materials, insurance, and property taxes pushed oper- The growing presence of non-individual investors in
ating expenses up nearly 8 percent in 2022, according some market segments could have important impli-
to Yardi Matrix. Consequently, net operating income cations for rental affordability and the rental stock.
growth dropped to 8.1 percent on a four-quarter trailing Research has shown that increased investor purchases
basis in the first quarter of 2023, down from a pandem- of multifamily rental housing in some neighborhoods
ic-high of 24.8 percent in the second quarter of 2021, is associated with increased evictions. At the same
according to the NCREIF Property Index. As a result, time, larger corporate landlords are more likely to
investor activity decreased precipitously. Transaction have digitalized and automated rent collection and
volumes declined to $26.7 billion in the first quarter property management processes, which can increase
of 2023, fully 50 percent lower than the $53.2 billion efficiency and reduce costs for property owners.
recorded a year earlier and 23 percent lower than the
same period in 2019.
New Construction Targets
The reduction in multifamily investment comes after High-End Market
an extended period of strong property performance.
Apartment prices fell 10 percent annually in March Multifamily production was extraordinarily strong over
2023 but were still up 131 percent over the past decade, the past year, with 342,000 multifamily rental units
according to Real Capital Analytics. The longer-term added in 2022 alone, mostly targeting the high end
strong financial performance attracted non-individual of the market. According to data from the Survey of
investors such as LLPs, LLCs, real estate corporations, Market Absorption, in the third quarter of 2022, the
and others to the market. According to the Rental median asking rent for new units reached $1,805, an
Housing Finance Survey, the share of rental proper- increase of $125, or 7 percent, from the $1,680 median in
ties owned by non-individual investors increased by the third quarter of 2015 after adjusting for inflation. This
9 percentage points over the past two decades to 27 growth in rents has shifted the distribution of asking
percent in 2021. rents for new multifamily units. Between 2015 and 2022,
the share of newly completed units with asking rents

34 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
 Figure 24
of $2,050 or more in nominal terms nearly doubled,
from 19 percent to 36 percent. Meanwhile, the share of Large Multifamily Buildings Constituted the Bulk
newly completed units with asking rents below $1,050 of Rental Stock Growth in the Last Decade
fell from 22 percent of units in 2015 to just 5 percent of Number of Rental Units (Millions)
new units in 2022. 18

16
Rising rents are at least partly driven by increased
amenities in new units to meet demand from house- 14
holds with higher incomes. For example, in 2021, 92
percent of multifamily for-rent completions had 12

in-unit laundry, an all-time high and well above the 10

76 percent share in 2011. Additionally, new multifamily
construction remains highly concentrated in large 8

metro areas, where land is most expensive. According

6
to the National Association of Home Builders’ Home 2011 2013 2015 2017 2019 2021

Building Geography Index, 70 percent of multifamily Single-Family 2–4 Units 5–19 Units 20 or More Units
permitting in the third quarter of 2022 was in large
Notes: Rental units may be occupied, vacant for rent, or rented
metro areas, including 38 percent in core counties and but unoccupied. Estimates for 2020 are interpolated due to data
28 percent in suburban counties. In comparison, just 27 collection issues experienced during the pandemic.
Source: JCHS tabulations of US Census Bureau, American
percent of multifamily permitting was in small metro Community Survey 1-Year Estimates.
areas and under 4 percent was outside metro areas.

Because rental demand has been strongest in high-

cost urban centers, multifamily completions have
become increasingly concentrated in large buildings.
Apartments in buildings with at least 20 units consti- was slightly slower still, increasing by just 163,000 units
tuted 89 percent of new multifamily completions in (1 percent) between 2011 and 2021. The most substantial
2021, up from 77 percent a decade earlier, according growth in single-family rentals occurred in the first half
to the Census Bureau’s Survey of Construction. Units in of this period and is attributed largely to tenure conver-
buildings with at least 50 units rose from 30 percent of sions of units that were previously owner-occupied.
all new units in 2011 to 59 percent in 2021. As a result, the Meanwhile, the number of rentals in small multifamily
number of apartments in large multifamily buildings buildings with 2 to 4 units fell by 136,000, a decline of
increased from 9.1 million units in 2011 to 11.6 million in 2 percent.
2021, according to the American Community Survey
(Figure 24). The changing characteristics and geography of new
rental construction have shifted the distribution of
While the number of rentals in smaller and midsize rents, reducing the share of units available to house-
buildings has increased as well, the growth was more holds with low and moderate incomes. So, while multi-
tempered. The number of units in buildings with 5 to 19 family rental construction is at a decades-long peak,
units increased by 171,000 units (2 percent) between the high asking rents of new units make them unaf-
2011 and 2021. Growth of single-family rental homes fordable for many households.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 35
Shrinking Supply of Low-Cost Rentals Deepening Unaffordability Reflected
in Record Cost Burdens
The supply of low-cost units has been declining
consistently in recent years, leaving renters with lower Affordability challenges have worsened for many
incomes with even fewer affordable places to live. In renters due to the recent sharp rise in rents, as well as
2021, just 17.1 percent of rental units offered contract income lost during the pandemic. In 2021, the number of
rents below $600, the maximum amount affordable cost-burdened renter households reached 21.6 million,
to households with incomes of $24,000 or less—about the highest recorded level since 2001, according to the
30 percent of all renter households—down from 26.7 American Community Survey. This number increased
percent in 2011 after adjusting for inflation (Figure 25). swiftly during the pandemic, growing by 1.2 million
The market has lost 3.9 million units with contract rents households between 2019 and 2021. Households that
below $600 in the last decade, and the loss has been were severely cost burdened accounted for most of
accelerating. This low-rent segment declined by 1.2 the growth, increasing by 1.1 million households to 11.6
million between 2019 and 2021 alone, to 8.0 million units. million. While the share of renter households with cost
burdens had declined nearly every year since 2014, the
During those same two years, virtually every state saw sharp increase in 2021 reversed this trend, increasing
declines in their low-cost rental stock, with 36 states the cost burden rate by 2.6 percentage points to 49.0
losing more than 10 percent of units with contract rents percent of renter households.
below $600 and 14 states losing more than 15 percent.
Many states with the most substantial losses were Renters with low incomes are by far the most likely to be
previously more affordable but have experienced cost burdened. In 2021, fully 85 percent of households
increasing demand and relatively strong population with incomes below $15,000—the approximate wages
growth. For example, the number of units with rents
below $600 declined by 86,000 in North Carolina, more Figure 25
than in any other state, and also dropped significantly
The Stock of Low-Rent Units Continues to Shrink
in Georgia (67,000) and Texas (64,000). Other large
Low-Rent Units (Millions) Share of Rental Stock (Percent)
losses were recorded in less expensive Midwestern
states experiencing slower population growth, 12 30

including Ohio (73,000), Illinois (63,600), Missouri

10 25
(44,000), Indiana (41,000), and Michigan (40,000).
8 20
The extent of state losses relates to the size of the
6 15
state—those with the fewest units had the smallest
absolute losses—and also reflects the existing avail- 4 10
ability of low-rent units. Regardless, such substantial
losses, particularly in states with historically lower rents, 2 5

make it even more difficult for households with low

0 0
incomes to secure affordable rentals. Nor is there any 2011 2013 2015 2017 2019 2021
indication of shifting tides. Trends driving the reduc- Number of Units Renting for Under $600 per Month
tion in low-rent units persist, including rent increases Low-Rent Units as Share of Rental Stock (Right scale)
to existing units, property upgrades, and losses of
Notes: Low-rent units have contract rents under $600. Rents are
this stock due to conversions to owner-occupancy, inflated to 2021 dollars using the CPI-U for All Items Less Shelter.
No-cash units are excluded.
deterioration, or demolition.
Source: JCHS tabulations of US Census Bureau, American
Community Survey 1-Year Estimates.

36 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
of a person working full-time at the federal minimum Cost burdens remain persistently high for households
wage—were cost burdened, the vast majority of whom of color, a product of long-standing discrimination in
(76 percent) were severely burdened. In addition, 81 housing and labor markets. While 43 percent of Asian
percent of households earning between $15,000 and and 45 percent of white renter households were cost
$29,999 were cost burdened—well above the 9 percent burdened in 2021, 57 percent of Black renter house-
of households with incomes of $75,000 or more. holds were burdened, along with 53 percent of Hispanic
renters, 50 percent of both Native Hawaiian and Pacific
However, cost-burden rates increased across all Islander and multiracial renters, and 47 percent of
income levels in 2021, with middle-income renter American Indian and Alaska Native renters.
households experiencing the largest uptick (Figure 26).
Between 2019 and 2021, the cost-burden rate increased Half of renters living in metropolitan areas were
3 percentage points for renters with incomes between cost burdened in 2021, compared with 41 percent in
$30,000 and $44,999, and 4 percentage points for smaller metropolitan areas and 39 percent in rural
renters earning between $45,000 and $74,999, as areas. Despite the relatively lower rate, 725,000 renter
compared with a 1 percentage point increase for households living in rural areas were cost burdened in
those earning at least $75,000. At the other end of the 2021, including 376,000 households who were severely
income spectrum, the cost-burden rate for renters with burdened. Cost-burden rates also varied significantly
incomes below $15,000 increased 2 percentage points, by metro, with higher cost-burden rates concentrated
a smaller rate of growth than that of middle-income in areas with higher rents, larger shares of households
households but also a population with many more with low incomes, or some combination of the two.
burdened renters. Examples include Miami (61 percent), Los Angeles

Figure 26

Across Income Levels, Cost Burden Rates Increased for Renters in 2021
Share of Cost-Burdened Renter Households (Percent)
90

80

70

60

50

40

30

20

10

0
Under $15,000 $15,000–29,999 $30,000–44,999 $45,000–74,999 $75,000 and Over All Households

Household Income
2019 2021

Notes: Incomes are adjusted for inflation using the CPI-U for All Items. Cost-burdened households spend more than 30% of income
on housing.
Source: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 37
(57 percent), San Diego (57 percent), and Honolulu (54 The Outlook
percent)—some of the nation’s costliest metros—as
well as New Orleans (55 percent), Baton Rouge (55 Despite cooling demand in 2022 and growing afford-
percent), and Memphis (52 percent)—metros with ability challenges, rental demand will be bolstered by
large numbers of renters with low incomes. several factors in the coming years. The substantial
and increasing barriers to homeownership will keep
While increasing cost burdens are widespread, rates many households in the rental market, even many with
vary by geography and household characteristics. relatively high incomes. Rental demand will be further
Yet, the primary driver is the same: rents have been boosted by the high numbers of younger households
rising faster than incomes. Between 2019 and 2021, the and households of color, both of whom have higher
median monthly rent increased 3 percent while the rentership rates.
median renter income fell 2 percent. The disparities
are even worse for renters with lower incomes. For At the same time, rental affordability challenges have
renter households making less than $30,000 a year, been worsening and show little sign of improvement.
rents rose 5 percent in real terms between 2019 and Recent declines in real incomes and increases in rents
2021 while incomes fell by 6 percent. Consequently, the produced a record-high number of renter house-
median residual income—the amount of money that holds with housing cost burdens. Although the pace
remains after paying housing costs—fell 5 percent for of rent growth in the professionally managed segment
all renters, while residual incomes for renters earning is slowing from its record-breaking post-lockdown
less than $30,000 annually fell by 22 percent to the surge, atypically fast rent growth and high inflation will
lowest level in two decades. This left these renters with continue to put pressure on household budgets in the
an average of just $380 per month to cover all other short term. Moreover, new construction continues to
needs and increasingly thin financial margins. target the high end of the market, while the declining
number of low-rent units will leave renters who have
low and moderate incomes with fewer affordable
options. Even though multifamily construction is at
historic highs, increasing production of moderately
priced rental housing is an urgent priority.

38 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
06
HOUSING CHALLENGES

The nation continues to face critical housing challenges. There is a significant housing shortage, and
affordable housing programs pale in comparison to the need. Housing insecurity and homelessness are
on the rise as pandemic-era programs expire. The existing housing stock requires investment to meet
the needs of an aging population and to address climate change. Meanwhile, racial segregation and
inequities persist. Programs and policies at the federal, state, and local levels are making incremental
progress toward addressing these various challenges, but more resources are needed.

Addressing the National impedes efforts to build the amount and variety of
Housing Shortage housing needed. The price of inputs to new residential
construction has increased 35 percent since the start
The country continues to face a substantial housing of the pandemic, including even steeper rises for some
shortfall of at least 1.5 million units. The rising cost of common building materials like plastic construction
land, labor, and building materials has emerged as a and gypsum products (Figure 27).
key challenge for homebuilders and developers and

Figure 27

Costs of Building Materials Have Surged Since the Start of the Pandemic
Change in Prices (Percent)
60

50

40

30

20

10

-1 0
Brick and Clay Ready-Mix Lumber and Gypsum Plastic Construction Inputs to New
Structural Tile Concrete Wood Products Products Products Residential Construction

February 2017-2020 February 2020-2023

Note: Inputs to new residential construction is not a composite of the other components and excludes capital, labor, and imports.
Source: JCHS tabulations of US Bureau of Labor Statistics, Producer Price Indexes.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 39
Increasing the use of alternative construction tech- Maine. And in Massachusetts, communities served by
niques—such as manufactured housing and off-site, public transit must now designate at least one zoning
modular, or panelized construction—could help to district that permits multifamily housing. Colorado
address cost constraints. The Terner Center found that also offers communities grants for affordable housing
off-site construction can reduce construction times development as an incentive to reform zoning and
on a 3- to 4-story multifamily building by at least 40 expedite approval processes. Although these reforms
percent and costs by 20 percent. Despite these poten- do not guarantee increased construction, they remove
tial savings, most homebuilders use on-site, stick-built substantial barriers to developing more housing types
construction, in part because of the high up-front costs that may also be more affordable to produce.
and lack of financing for off-site techniques.

Another alternative construction model is the acces- Federal Assistance Continues to

sory dwelling unit (ADU), a type of infill housing that Fall Short
can help increase supply in communities with limited
available land. Some states and cities have created While construction techniques and a broader range
policies and financing mechanisms to facilitate ADU of housing types can help to increase the supply of
construction, including California, where lawmakers modestly priced homes, subsidies are needed to make
passed a suite of innovative bills in 2019 that streamline housing affordable to households with the lowest
the process and make it easier to build ADUs. Two years incomes, who are overwhelmingly renters. For every
later, the state introduced grants to help homeowners 100 renter households who earn less than 50 percent
with low to moderate incomes build ADUs. San Diego of area median income, only 55 units are affordable
went one step further with its ADU Bonus program, and available. With just one of every four income-
allowing property owners to add one ADU for every eligible households receiving rental assistance, there
deed-restricted ADU that maintains affordability for are also not enough subsidies to bridge the gap
at least 10 years. between rents and what these households can afford.
There is an urgent need to expand subsidy programs
The national housing shortage is also the product and improve their efficacy.
of local restrictive zoning policies and other regula-
tory barriers that make it difficult to build a range of Increasingly, the federal government has turned
housing types at different price points. An estimated to tenant-based assistance in the form of Housing
75 percent of land in many cities is zoned exclusively Choice Vouchers, which typically cover the difference
for single-family homes. Growing policy momentum between 30 percent of a household’s income and their
at the federal level seeks to address restrictive rent, up to a local fair market rent. In 2022, vouchers
zoning. For example, the 2023 omnibus appropria- served 2.3 million households (Figure 28). However,
tions bill included $85 million in HUD grants for cities the program’s regulatory requirements and inspec-
to identify and implement reforms that will increase tions can be cumbersome for landlords, who are not
density, reduce minimum lot sizes, and streamline required to accept vouchers in most places. Laws
permitting processes. that prevent discrimination against voucher holders
could help renters successfully use vouchers and have
Similarly, some states are using legislation to reduce recently been adopted in Hawaii, Illinois, and several
local zoning barriers. In 2023, Montana and Wash- cities, but do not address landlords’ concerns with
ington passed sweeping reforms allowing other types the program.
of housing on parcels previously zoned exclusively for
single-family homes, joining California, Oregon, and

40 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
Figure 28
835,000 households in 2022. Due to federal legislation,
Rental Subsidies Have Increasingly Shifted to this deeply affordable housing cannot be increased
Tenant-Based Assistance and Tax Credits beyond 1999 levels, and chronic underfunding has
Occupied Units (Millions) created a severe maintenance backlog, estimated
3.0 at more than $80 billion, that threatens the remaining
stock. One of the only options available to public
2.5
housing providers to address maintenance, rehabilita-
tion, and redevelopment needs is the Rental Assistance
2.0
Demonstration program. RAD converts public housing
1.5 units to longer-term Section 8 contracts, offering a
more stable, predictable funding stream that property
1.0 owners can leverage to secure other financing to rede-
velop properties. As of early 2023, 214,000 units have
0.5
been converted through RAD. The remaining stock has
0.0 substantial maintenance needs.
1992 1998 2004 2010 2016 2022

Public Housing Housing Choice Vouchers Similar preservation challenges exist with units funded
Project-Based Section 8 LIHTC by USDA Section 515, an important source of affordable
Notes: LIHTC occupancy is based on the 98.6% rate reported by rental housing that provided housing for 378,000 rural
Novogradac in 2021. LIHTC units include low-income units only. households in 2022. The program has made few new
Source: JCHS tabulations of HUD, Picture of Subsidized
Households Reports and Low-Income Housing Tax Credit loans in recent years and most of the existing loans
Database; Robert Collinson, Ingrid Gould Ellen, and Jens Ludwig, are reaching maturity, at which point the properties
Low-Income Housing Policy, NBER Working Paper, 2015.
no longer have to remain affordable. The program is
also losing units due to loan prepayments. The Housing
On the supply side, the Low-Income Housing Tax Assistance Council found that nearly 22,000 units left
Credit (LIHTC) has supported more than 3.6 million the program from 2016 to 2021 alone.
low-income units since 1986. The credit incentivizes
affordable rental housing by reducing the tax bill of a Preserving subsidized housing in all its forms requires
development’s investors. In return, the property owners additional resources. The national Housing Trust Fund
commit to keeping a portion of the development’s units (HTF) is one flexible source of funding that could help.
affordable to households with lower incomes. LIHTC However, its annual funding varies based on Fannie
properties typically have a 30-year affordability period, Mae’s and Freddie Mac’s earnings, with allocations
after which the unit can flip to market rate. But because hitting a record $740 million in 2022 before dropping
property owners can opt to convert units to market rate to $382 million in 2023. Additionally, HTF resources
after 15 years through the qualified contract process, are modest compared with the scale of the problem
an estimated 10,000 low-income units per year are and are split between new construction and pres-
lost prematurely. ervation. According to the National Low Income
Housing Coalition, just 15 percent ($41 million) of the
Another major challenge is the preservation of the 2018 HTF allocations went to preserving existing
dwindling public housing stock, which was home to affordable units.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 41
The Sunsetting of Pandemic and localities have tried to fill the gap. Since 2021,
Housing Resources Connecticut, Maryland, Washington, and nine local
governments have enacted right to counsel legislation.
The pandemic fueled a growing awareness of the
dangers of housing instability and spurred new housing Compared with renters, homeowners fared better
assistance programs for both renters and home- during the pandemic, both because they were less
owners. Three years after the start of the pandemic, likely to lose employment income and because those
key programs are winding down even as households unable to make their mortgage payments benefited
continue to experience financial distress. For renters, from widely available forbearance protections. Never-
the Emergency Rental Assistance program, which theless, delinquencies are a concern for about 2 million
provided more than $46 billion to keep renters housed homeowner households. The $9.9 billion provided
and support landlords, now has less than $8.5 billion through the Homeowner Assistance Fund will help
in remaining funds. Meanwhile, 13 percent of renter some to make mortgage, homeowner’s insurance,
households were behind on rent in the last half of 2022. and utility payments. By the fourth quarter of 2022, $3.8
billion was obligated, providing critical assistance for
Additionally, in response to concerns of widespread over 241,000 households. However, with more than a
pandemic-induced housing instability, Congress third of available resources already spent, the fund
provided three rounds of funding to HUD from 2020 will likely be depleted quickly.
to 2022 to ensure at-risk renters have legal represen-
tation to help avoid eviction. However, this funding As federal pandemic housing assistance programs
is limited and eviction filings are rising in states wind down, state and local governments are turning
and cities across the country, nearly reaching pre- to general fiscal recovery funds to meet ongoing
pandemic levels at the end of last year after dropping housing needs. With longer spending timelines and
quickly early in the pandemic (Figure 29). As federal more potential uses, $14.2 billion of state and local
programs and eviction protections end, some states fiscal recovery funds were budgeted as of September
2022 to support nearly 1,800 housing affordability proj-
ects and programs to address short- and longer-term
Figure 29
housing needs. At the end of 2021, these funds had
Evictions Returned to Historic Average by Late 2022 already helped 770,000 households with rent, mort-
Eviction Filings Relative to Pre-Pandemic Average (Percent) gage, or utility assistance and 100,000 households
100
with eviction prevention services. The experience with
90
pandemic assistance for both emergency and longer-
80
term housing needs has demonstrated that these are
70
effective means to keep people stably housed and
60 merit continued support.
50
40
30
A Rising Number of People
20 Experience Homelessness
10
0 Overall homelessness increased only slightly during
2020 2021 2022
the pandemic, in part due to declining numbers of
Notes: Data include eviction filings in 10 states and 34 cities. Rates people staying in shelters. However, this masked a
are filings relative to a pre-pandemic average baseline. substantial rise in people experiencing unsheltered
Source: JCHS tabulations of Eviction Lab, Eviction Tracking System
through December 31, 2022. homelessness, that is, living in places not intended for

42 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
human habitation. While the total number of people ness. Additionally, state and local governments have
experiencing homelessness grew to 582,460 in 2022, collectively committed more than $3.3 billion in fiscal
up 0.3 percent, or 2,000 people, since January 2020, recovery funds to homelessness services and housing.
unsheltered homelessness increased by 3.4 percent, Nevertheless, more funding is needed to meet the
or 7,750 people, to 233,830 people, offsetting the 1.6 scale of the challenge, including increased support
percent decrease in people staying in shelters. These for rental housing assistance and affordable housing
pandemic trends continued a longer-term shift—the to help address the root of the problem.
unsheltered population increased by 35 percent from
2015 to 2022 with the addition of 60,560 people. Home-
lessness is rising in many states and communities The Aging Housing Stock
across the country. Since 2020, homelessness has Needs Investment
increased in 27 states, with the most notable growth in
California, followed by Louisiana, Tennessee, Oregon, In the face of a sustained housing shortage, improving
and Arizona. Though more than half of all people existing housing is critical. In 2021, the age of the
who are unhoused live in urban areas, homeless- median home hit 43 years, up from 27 years in 1991, and
ness decreased in major cities during the pandemic. 9.5 million homes (6.7 percent) had structural deficien-
Meanwhile, homelessness increased 4 percent in cies or lacked basic features like plumbing, electricity,
suburban areas, where another quarter of people live water, and heat. The federal Community Development
who are experiencing homelessness. The remaining 18 Block Grant Program and HOME Investment Partner-
percent of unhoused people live in rural areas, which ships Program fund needed repairs for households with
experienced the largest increase in homelessness low incomes, who are most likely to live in inadequate
(6 percent) during the pandemic. housing. Many state and local governments offer home
repair programs as well, including a substantial new
People of color continue to be overrepresented in $120 million commitment for Pennsylvania’s Whole-
the unhoused population due to discrimination in Home Repairs Program that helps small landlords and
housing, employment, and social services. Black homeowners with low incomes. However, the Federal
people constitute 37 percent of people experiencing Reserve Bank of Philadelphia estimates that a full $57.1
homelessness and just 12 percent of the total popu- billion will be needed nationwide just to repair homes
lation. Similarly, Hispanic/Latino people are nearly a occupied by these households.
quarter of unhoused people and less than a fifth of the
total population. Additionally, the largest increases Much of the existing housing stock lacks basic acces-
in homelessness during the pandemic were among sibility features, such as no-step entrances, bath-
Native Hawaiian and Pacific Islander (19 percent), Asian room grab bars, or other modifications to support the
(8 percent), and Hispanic/Latino (8 percent) people. nation’s rapidly aging population. As of 2019, more
than 2 million households headed by someone age
Today, new federal resources are available to address 65–79 (8 percent) and nearly 1.5 million headed by
homelessness. The 2023 omnibus spending bill someone age 80 and over (18 percent) reported diffi-
provided $3.6 billion for homelessness assistance culty navigating or using their homes, threatening
grants and $2.7 billion to support veterans experiencing their ability to age in their homes and increasing the
homelessness. The 2021 the American Rescue Plan Act likelihood of incurring nursing home expenses. Recog-
included $5 billion for state and local governments nizing this urgent need, the 2023 omnibus spending bill
to fund services, shelter, and housing for unhoused doubled to $30 million the funding for the Older Adult
people and at-risk households through the HOME-ARP Homes Modification Program and expanded eligibility
program. Smaller efforts included $315 million in grants to include renters, helping more older adults to remain
to address rising unsheltered and rural homeless- in their current homes through low-cost modifications.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 43
Additionally, in many states, Medicaid waivers fund Climate Change Increasingly
physical modifications and assistive technologies that Threatens Homes
can allow older adults and people with disabilities to
remain in their homes. However, because waivers are The nation’s housing stock is at risk from increasingly
not an entitlement, many states have waiting lists and frequent disasters. CoreLogic estimated that more
eligibility criteria vary. than 14.5 million homes were affected by climate-re-
lated hazards—such as hurricanes, wildfires, and hail—
Modifications to the existing housing stock are also in 2021, amounting to $56.9 billion in damage from
needed to reduce greenhouse gas emissions from large events. Even more homes are at future risk across
the residential sector, and several recent efforts aim the country, including 59.9 million in areas with at
to help households make incremental changes. The least moderate expected annual losses from hazards
Inflation Reduction Act of 2022 provided almost $9 (Figure 30), leaving people vulnerable to damaged or
billion in energy-efficiency and electrification rebates, destroyed homes and displacement.
and also extended tax credits, such as the Residential
Clean Energy Credit, that incentivize homeowners to Most of the federal response to climate change
make energy improvements. Likewise, the Infrastruc- has focused on helping communities and house-
ture Investment and Jobs Act provided an additional holds recover from disasters rather than proactively
$3.5 billion to the Weatherization Assistance Program, protecting them from future risks. FEMA provides direct
which helps 35,000 low-income households make assistance following disasters through its Individuals
energy-efficient upgrades in a typical year. and Households Program, offsetting costs such as

Figure 30

Across the Country, More Than 59 Million Homes Are Threatened by Climate-Related Disasters
Number of Units In
High-Risk Counties
Under 10,000
10,000-49,999
50,000-199,999
200,000 and Over

Notes: High-risk areas have a relatively moderate, relatively high, or very high expected annual loss (EAL) score. EAL represents the
average annual dollar loss resulting from natural hazards. The number of units in high-risk counties is aggregated from the tract level.
Sources: JCHS tabulations of Federal Emergency Management Agency, November 2021 National Risk Index EAL data; US Census Bureau,
2021 American Community Survey 5-Year Estimates.

44 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
temporary housing and home repairs. In 2022, FEMA Segregation and Racial
provided $1.9 billion to 1.2 million households through Inequities Persist
this program. To fill gaps in FEMA assistance, the
2022 Rapid Unsheltered Survivor Housing (RUSH) Racial segregation remains a hallmark of the nation’s
program enables communities to provide emer- housing, with Black and Hispanic households concen-
gency shelter, rapid re-housing, and homelessness trated in communities of color. According to the Diver-
services after disasters. However, these funds are sity and Disparities Project, the typical white person in
limited, with $56 million initially set aside and $6.8 2020 lived in a neighborhood where people of color
million allocated to Florida after Hurricane Ian. For made up less than a third of the population, while the
long-term recovery, Congress also appropriated a typical Black or Hispanic person lived in a neighbor-
total of $10 billion of Community Development Block hood that was two-thirds people of color (Figure 31).
Grant Disaster Recovery funds in 2021–2023 to help
communities rebuild. Decades of exclusionary land use, inequitable housing
policies, and systemic racism have led to underinvest-
Preventing or minimizing future losses is difficult, espe- ment in communities of color, creating wide disparities
cially as people increasingly move to places at high in access to quality public and private services, with
risk of disaster hazards. Hazard risk disclosures could negative implications for the health, well-being, and
help more people understand risks when purchasing life trajectory of the residents. Under- or disinvestment
homes, but only a handful of states require such also limits the ability of people of color to build wealth
disclosures at the point of sale. At the federal level, through housing.
the National Flood Insurance Program implemented a
pricing change in 2021 that better reflects a property’s
flood risk. While this change helps to spotlight the risk
of floods, it also raises both affordability concerns for Figure 31
homeowners with low incomes and the stakes for those
Racial Segregation Persists Across the Country
priced out of insurance.
Average Neighborhood Composition (Percent)

Ultimately, to adapt to increasing risks from climate 100

change, less development on high-risk land, phys-

80
ical improvements to reduce exposures, and better
household awareness of risks will be necessary. FEMA’s 60
Hazard Mitigation Grant Program has supported such
efforts, including the New Jersey Blue Acres Buyout 40

Program, which pairs property acquisitions with

20
supportive services to manage retreat from flood-
prone areas. Stronger building codes for new construc- 0
Black Person Hispanic Person Asian Person White Person
tion in hazard-prone areas can also help to prevent an
estimated $1.6 billion per year in losses, according to Race/Ethnicity of Neighbors
a recent FEMA study. Over the longer term, mitigation White Black Hispanic Asian Another Race
efforts and disaster response will require a substantial
Note: Neighborhoods are census tracts.
commitment from federal and state governments to Source: Brown University, Diversity and Disparities Project
help high-risk communities. estimates of US Census Bureau, 2020 Decennial Census.

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 45
Investing in communities of color is critical for lations that have racially disparate impacts or that
addressing these racial inequities. However, care must result in displacement or exclusion. The New York City
be taken to mitigate the risk of displacement of current Council enacted legislation in 2021 that creates an
residents. Mindful of that balance, Enterprise Commu- equitable development data tool and requires certain
nity Partners launched the Equitable Path Forward land use applications to include a racial equity report
program in 2020, an initiative expected to leverage $3.5 detailing how the project addresses fair housing goals
billion over five years to extend capital to communities and equitable access to opportunity. However, given
of color and diversify the real estate industry. In Seattle, the widespread persistence of segregation, much
the 2021 Equitable Communities Initiative started with more needs to be done.
an initial $100 million commitment to invest in BIPOC
communities and housing. The city also created the
Equitable Development Monitoring Program to track
The Outlook
community indicators related to race and social equity The end of pandemic relief comes as worsening
and to mitigate displacement risks. affordability puts continued pressure on the already
inadequate housing safety net. Despite signs of market
In addition to investing in underserved communities, cooling, households across the country are feeling
several recent efforts seek to open more communi- the effects of the past two years’ rapidly rising rents
ties to people of color. At the beginning of 2023, HUD and home prices. Recent zoning reforms may help
proposed a new Affirmatively Furthering Fair Housing increase the range of housing options available over
rule, a reference to the mandate in the Fair Housing the long term, but immediate solutions to address the
Act of 1968 that requires the government not just to housing affordability crisis are also needed. Indeed,
eliminate discriminatory treatment but to proactively more housing assistance and affordable housing
promote inclusive communities. The rule would require support from all levels of government are necessary
recipients of HUD funding to submit an equity plan to stave off rising homelessness and housing insecurity
every five years that identifies fair housing issues in among households with low incomes, as is a concerted
their community, as well as goals and strategies to effort from the nonprofit and for-profit sectors. Addi-
address them. tionally, communities must confront the consider-
able challenges brought about by the aging housing
At the state and local levels, communities are exper- stock, climate change, and persistent systemic racism.
imenting with racially equitable zoning and plan- Thoughtful reinvestment in the housing stock and in
ning initiatives to provide a broader range of housing neighborhoods is critical to meeting future needs
options in a variety of neighborhoods. In 2021, Wash- while reducing long-standing inequities and helping
ington State passed a law requiring local governments communities recover from natural disasters.
to identify and reform land use policies and other regu-

46 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
07
ADDTIONAL RESOURCES

Table A-1: Housing Cost-Burdened Households by Tenure and Income: 2001, 2019, and 2021

The following interactive maps and data tables are a sample of

the additional resources available at [Link].

Interactive Maps and Data

Shares of Cost-Burdened Homeowner and Renter Households by Metro Area: 2021

Components of Population Change by County: 2021–2022

Decline in Low-Cost Rentals by State: 2011–2021

Homebuyer Affordability by Metro Area: 2023:1

Annual Home Price Growth by Metro Area: 2010–2023

Data Tables
Housing Market Indicators for the US: 1980–2022

Housing Cost-Burdened Households by Demographic Characteristics: 2021

Shares of Cost-Burdened Homeowners and Renters by State: 2021

Monthly Costs for the US Median-Priced Home by Metro Area: 2022:1–2023:1

Domestic Migration by County Type: 2019–2022

Household Median Wealth, Home Equity, and Cash Savings by Race/Ethnicity: 2019

J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y T H E STAT E O F T H E N AT I O N ’S H O U S I N G 2023 47
Table A-1

Housing Cost-Burdened Households by Tenure and Income: 2001, 2019, and 2021
Households (Thousands)

2001 2019 2021

Tenure Not Moderately Severely Not Moderately Severely Not Moderately Severely
and Income Burdened Burdened Burdened
Total
Burdened Burdened Burdened
Total
Burdened Burdened Burdened
Total

Owners

Under $15,000 625 625 2,366 3,616 575 591 2,929 4,094 608 655 3,799 5,061

$15,000–29,999 3,401 1,529 1,749 6,678 3,189 1,673 1,922 6,784 3,232 1,714 2,212 7,157

$30,000–44,999 4,733 1,727 1,058 7,519 4,815 1,875 1,070 7,760 4,997 2,003 1,276 8,276

$45,000-74,999 11,125 3,261 908 15,294 11,875 2,835 832 15,542 12,453 3,103 989 16,544

$75,000 and Over 33,348 3,129 404 36,880 41,605 2,639 367 44,611 43,209 2,808 430 46,448

Total 53,231 10,270 6,485 69,986 62,058 9,613 7,121 78,791 64,499 10,282 8,706 83,487

Renters

Under $15,000 1,184 671 4,227 6,082 1,256 784 5,355 7,395 1,192 727 5,938 7,857

$15,000–29,999 1,819 2,575 2,554 6,949 1,615 2,694 3,499 7,808 1,474 2,380 3,714 7,569

$30,000–44,999 3,225 2,406 481 6,112 2,827 2,982 1,187 6,996 2,610 3,018 1,374 7,002

$45,000-74,999 7,196 1,365 170 8,731 6,718 2,549 435 9,702 6,438 2,874 487 9,798

$75,000 and Over 8,234 317 25 8,576 11,206 861 43 12,110 10,774 947 110 11,831

Total 21,658 7,335 7,457 36,450 23,623 9,870 10,518 44,012 22,488 9,947 11,623 44,058

All Households

Under $15,000 1,809 1,296 6,593 9,698 1,831 1,375 8,284 11,489 1,799 1,382 9,737 12,919

$15,000–29,999 5,220 4,104 4,303 13,627 4,804 4,368 5,420 14,592 4,706 4,094 5,926 14,726

$30,000–44,999 7,958 4,133 1,540 13,631 7,642 4,857 2,257 14,756 7,607 5,021 2,650 15,278

$45,000-74,999 18,322 4,626 1,078 24,025 18,593 5,384 1,267 25,244 18,891 5,977 1,475 26,343

$75,000 and Over 41,581 3,446 429 45,456 52,811 3,500 410 56,721 53,983 3,756 540 58,279

Total 74,889 17,605 13,942 106,436 85,681 19,483 17,639 122,803 86,986 20,229 20,329 127,545

Notes: Moderately (severely) cost-burdened households spend more than 30% (more than 50%) of income on housing. Households
with zero or negative income are assumed to be severely burdened, while renters paying no cash rent are assumed to be unburdened.
Income cutoffs are adjusted to 2021 dollars using the CPI-U for All Items.
Source: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.

48 T H E STAT E O F T H E N AT I O N ’S H O U S I N G 20 23 J O I N T C E N T E R F O R H O U S I N G ST U D I E S O F H A R VA R D U N I V E R S I T Y
The State of the Nation’s Housing 2023 was prepared by the Harvard Joint Center for Housing Studies. The Center
advances understanding of housing issues and informs policy. Through its research, education, and public outreach
programs, the Center helps leaders in government, business, and the civic sectors make decisions that effectively
address the needs of cities and communities. Through graduate and executive courses, as well as fellowships and
internship opportunities, the Center also trains and inspires the next generation of housing leaders.

STAFF STUDENTS
Whitney Airgood-Obrycki Mary Lancaster John Arenas Kristen Myers

Corinna Anderson David Luberoff Natalie Boverman Samuel Naylor

Jean Barrett Carlos Martín Michael Bueno Livesey Pack

James Chaknis Daniel McCue Alex Cardelle Samantha Page

Kerry Donahue Jennifer Molinsky Yona Chung Isis Patterson

Riordan Frost Samara Scheckler Emily Hsee Arielle Rawlings

Christopher Herbert Sophia Wedeen Michael Johnson Lillian Saniel-Banrey

Alexander Hermann Peyton Whitney Taylor Jones Elizabeth Sheild

Alexander von Hoffman Abbe Will Hsuan Lo Aaron Smithson

Bailey Hu Francisco Montes Caijue Wu

FELLOWS & ADVISORS FOR ADDITIONAL COPIES, PLEASE CONTACT

Barbara Alexander Daniel Fulton Joint Center for Housing [Link]
Studies of Harvard University
Frank Anton Joe Hanauer twitter: @Harvard_JCHS
1 Bow Street, Suite 400
Michael Carliner Nicolas Retsinas
Cambridge, MA 02138
Sharon Cornelissen Mark Richardson

EDITOR COPYEDITOR DESIGNER

Loren Berlin Devlan O’Connor Pixels 360