The U.S. housing recovery should regain its footing, but also faces a number of challenges, concludes The State of the Nation’s Housing report released by the Joint Center for Housing Studies of Harvard University. Tight credit, still elevated unemployment, and mounting student loan debt among young Americans are moderating growth and keeping millennials and other first-time homebuyers out of the market.
“The housing recovery is following the path of the broader economy,” says Chris Herbert, research director at the Joint Center for Housing Studies. “As long as the economy remains on the path of slow, but steady improvement, housing should follow suit.”
Although the housing industry saw notable increases in construction, home prices, and sales in 2013, household growth has yet to fully recover from the effects of the recession. Young Americans, saddled with higher-than-ever student loan debt and falling incomes, continue to live with their parents. Indeed, some 2.1 million more adults in their 20s lived with their parents last year, and student loan balances increased by $114 billion.
Still, given the sheer volume of young adults coming of age, the number of households in their 30s should increase by 2.7 million over the coming decade, which should boost demand for new housing. “Ultimately, the large millennial generation will make their presence felt in the owner-occupied market,” says Daniel McCue, research manager of the Joint Center, “just as they already have in the rental market, where demand is strong, rents are rising, construction is robust, and property values increased by double digits for the fourth consecutive year in 2013.”
One key to realizing the millennials’ potential in the housing market is for the economy to grow to the point where their incomes start to rise. Another important factor is how potential GSE reform will affect the cost and availability of mortgage credit for the next generation of homebuyers, which will be the most diverse in the nation’s history. By 2025, minorities will make up 36 percent of all US households and 46 percent of those aged 25–34, thus accounting for nearly half of the typical first-time homebuyer market.
The report, as well as an interactive map released by the Joint Center, also highlights the ongoing affordability challenge facing the country, as cost burdens remain near record levels and over 35 percent of Americans spend more than 30 percent of their income for housing. The situation is particularly grim for renters, where 50 percent are cost burdened and 28 percent are severely cost burdened (meaning they spend over half of their income for housing).
“When available, federal rental subsidies make a significant difference in the quality of life for those struggling the most,” says Herbert. “Between 2007 and 2011, the number of Americans eligible for assistance rose by 3.3 million, while the number of assisted housing units was essentially unchanged. Sequestration forced further cuts in housing assistance, which have yet to be reversed.”
Related Stories
| Mar 16, 2011
AIA offers assistance to Japan's Architects, U.S. agencies coordinating disaster relief
“Our hearts go out to the people of Japan as a result of this horrific earthquake and tsunami,” said Clark Manus, FAIA, 2011 President of the AIA. “We are in contact with our colleagues at AIA Japan and the Japan Institute of Architects to offer not only our condolences but our profession's technical and professional expertise when the initiative begins focusing on rebuilding."
| Mar 16, 2011
Are you working on a fantastic residence hall project? Want to tell us about it?
The feature story for the May 2011 issue of Building Design+Construction will focus on new trends in university residence hall design and construction, and we’re looking for great projects to report on and experts to interview. Projects can involve new construction or remodeling/reconstruction work, and can be recently completed, currently under construction, or still on the boards.
| Mar 16, 2011
Foster + Partners to design carbon-neutral urban park for West Kowloon Cultural District in Hong Kong
Foster + Partners has been selected by the board of the West Kowloon Cultural District Authority to design a massive 56-acre urban park on a reclaimed harbor-front site in Hong Kong. Designed as a carbon-neutral development, “City Park” will seamlessly blend into existing streets while creating large expanses of green space and seventeen new cultural venues.
| Mar 15, 2011
What Starbucks taught us about redesigning college campuses
Equating education with a cup of coffee might seem like a stretch, but your choice of college, much like your choice of coffee, says something about the ability of a brand to transform your day. When Perkins + Will was offered the chance to help re-think the learning spaces of Miami Dade College, we started by thinking about how our choice of morning coffee has changed over the years, and how we could apply those lessons to education.
| Mar 15, 2011
What will the architecture profession look like in 2025?
The global economy and the economic recession have greatly affected architecture firms' business practices. A Building Futures survey from the Royal Institute of British Architects looks at how these factors will have transformed the profession and offers a glimpse of future trends. Among the survey's suggestions: not only will architecture firms have to focus on a financial and business approach rather than predominantly design-led offices, but also company names are predicted to drop ‘architect’ altogether.
| Mar 15, 2011
Passive Strategies for Building Healthy Schools, An AIA/CES Discovery Course
With the downturn in the economy and the crash in residential property values, school districts across the country that depend primarily on property tax revenue are struggling to make ends meet, while fulfilling the demand for classrooms and other facilities.
| Mar 14, 2011
Renowned sustainable architect Charles D. Knight to lead Cannon Design’s Phoenix office
Cannon Design is pleased to announce that Charles D. Knight, AIA, CID, LEED AP, has joined the firm as principal. Knight will serve as the leader of the Phoenix office with a focus on advancing the firm’s healthcare practice. Knight brings over 25 years of experience and is an internationally recognized architect who has won numerous awards for his unique contributions to the sustainable and humanistic design of healthcare facilities.
| Mar 11, 2011
University of Oregon scores with new $227 million basketball arena
The University of Oregon’s Matthew Knight Arena opened January 13 with a men’s basketball game against USC where the Ducks beat the Trojans, 68-62. The $227 million arena, which replaces the school’s 84-year-old McArthur Court, has a seating bowl pitched at 36 degrees to replicate the close-to-the-action feel of the smaller arena it replaced, although this new one accommodates 12,364 fans.
| Mar 11, 2011
Temporary modular building at Harvard targets sustainability
Anderson Anderson Architecture of San Francisco designed the Harvard Yard childcare facility, a modular building manufactured by Triumph Modular of Littleton, Mass., that was installed at Harvard University. The 5,700-sf facility will remain on the university’s Cambridge, Mass., campus for 18 months while the Harvard Yard Child Care Center and the Oxford Street Daycare Coop are being renovated.
| Mar 11, 2011
Holiday Inn reworked for Downtown Disney Resort
The Orlando, Fla., office of VOA Associates completed a comprehensive interior and exterior renovation of the 14-story Holiday Inn in the Downtown Disney Resort in Lake Buena Vista, Fla. The $25 million project involved rehabbing the hotel’s 332 guest rooms, atrium, swimming pool, restaurant, fitness center, and administrative spaces.
