COVID-19's impact has been felt across the country and myriad industries. Although housing has generally been a bright spot in the midst of the pandemic, the Harvard University's Joint Center for Housing Studies recent report, "The State of the Nation’s Housing 2020," shines a spotlight on key areas for improvement — namely in the lack of supply and the impact that has on housing insecurity for many U.S. residents.
According to the report, single-family construction has been strong this year, and new home sales were up. Demand for housing included a 20% increase year over year in purchase loan applications this fall, and refinances in the first half of the year were triple what they were during the same period the year prior.
However, the supply of existing homes was at its lowest level since 1982. The tightened supply combined with strong demand has led to increased home prices, with prices rising 5.7% year over year in September compared to a 3.5% average increase in 2019.
Home owners have also been struggling with mortgage payments amid the pandemic. More than 6 million home owners entered a mortgage forbearance plan between March and October of this year, with 36% of home owners overall reporting income loss between March and September, nearly half (44%) of whom earn $25,000 or less per year.
The greater impact on low-income households is also reflected in the rental market. According to the report, 37.1 million households, or 30%, were cost burdened in 2019, with 17.6 million (14%) identified as severely cost burdened (spending more than 50% of their incomes on housing). Nearly half of renters reported losing their jobs between mid-March and late September, with 15% of renters noting that they are behind on payments. That ratio rises to one in five renters for those earning less than $25,000 a year, who may not be able to catch up on rent without assistance.
"So far, state and federal moratoriums have slowed evictions," says Chris Herbert, managing director of the Joint Center for Housing Studies, in a press release. "But without additional federal aid, many households that have missed payments may be unable to cover their back rents and will find themselves on the brink of eviction and at risk of homelessness."