Housing cost burdens in the DC metro area
The Joint Center for Housing Studies (JCHS) recently released their annual State of the Nation’s Housing report, which reveals how the inverse relationship between homeownership and rental rates across the country has led to an increase in households in which housing costs are severely burdensome.
Following the housing crisis in 2008, a wave of foreclosures, more-stringent credit standards to attain mortgages and other factors such as student loan burdens, the country’s homeownership rate is now much lower.
Despite a relatively strong recovery for housing construction starts, the rental market has become the main driver of the housing recovery. The JCHS report states that “rental demand has risen across all age groups, income levels, and household types, with large increases among older renters and families with children.” The resultant five-year drop in rental vacancies has led to inflated rents and a greater share of cost-burdened renter households.
Conversely, the share of cost-burdened homeowners has decreased, partially due to foreclosures pushing financially-strained homeowners out of the market.
Overall, the report finds that at least one in 10 households nationwide are severely cost-burdened, with an average of 10-25 percent of households spending more than half of their income on housing in most metropolitan areas. An additional 17 percent of all households spend 30-50 percent of their income on housing, which qualifies them as moderately cost-burdened.
The DC area is no exception to these broader trends. The report shows that 14.7 percent of all households in the region, where median housing costs are $1,700 a month, deal with severe cost burdens. An additional 18.6 percent of DC-area households are moderately cost-burdened.
Housing costs for renters, as defined by the JCHS report, are a gross measure including both rent and utilities, while costs for homeowners include mortgage, property taxes, insurance, utilities and additional homeowner fees. As with many nationwide housing studies, the DC metropolitan area includes a broad swath of the city’s suburbs, from Gaithersburg down through Reston and including Jefferson County, West Virginia.
This article originally published at http://dc.urbanturf.com/articles/blog/the_state_of_the_nations_housing/11410
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