A Mortgage Bankers Association (MBA) Research Institute for Housing America (RIHA) study determined home prices and rent appreciation have created economic obstacles for households, especially low- and moderate-income (LMI) renters.
The analysis showed an impact on those living in cities with recent employment growth but significant housing supply constraints.
The report, “The Location of Affordable and Subsidized Rental Housing Across and Within the Largest Cities in the United States,” outlined nearly all of the 50 largest metropolitan statistical areas (MSAs) since 2001 have become less affordable for renters and prospective first-time homebuyers.
“There is a significant lack of affordable housing supply in the United States, and the problem is worsening. In 2001, a low- and moderate-income household could spend less than 30 percent of its income to rent the median rental unit in 38 of the largest 50 metro areas,” Michael Eriksen, author of the report and West Shell Associate Professor of Real Estate at the University of Cincinnati and Academic Director of the Real Estate program, said.
“By 2020, this was the case in only 17 metro areas.”
Eriksen said the highest and fastest-growing rents have been in cities with strong employment and population growth that have a scarcity of developable land because of geography and land-use restrictions.
Per the report, a typical household in 2020, in comparison to 2001, needed to devote an additional 7.6 percent of its income to rent a median-priced housing unit; the population-weighted median rent of a two-bedroom unit across the 50 largest MSAs is projected to be $1,629 per month in 2021; and on average, rents appreciated 175 percent faster than median incomes with the largest differential in growth rates estimated to occur in Seattle, at 376 percent.