In the Latest Harvard Report, Cost Burdens Continue for Renters and Homeowners

Cost burdens continue for homeowners as well as renters, according to the latest report from Joint Center for Housing Studies of Harvard University.

The quarterly report, which utilized data from RealPage Market Analytics, among other sources, emphasized that apartment rents and for-sale housing prices remained elevated in early 2024, as inventories remain historically low. While construction for both single-family homes and apartments is accelerating, deliveries are not yet coming online at a quick enough pace.

The price of single-family homes rebounded to a new all-time high in early 2024, quite the feat in the face of persistently elevated interest rates. After declining briefly in early 2023, home prices were back up in the first few months of 2024, climbing at an annual rate of 6.4% as of February, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index. U.S. home prices are up a significant 47% when indexed back to early 2020.

Across the apartment market, rent change slowed recently, but remained significant by historic standards. Effective asking rents for professionally managed apartments ticked up just 0.2% year-over-year in early 2024, with change measured on a same-store basis. However, when indexed to 2020, rents were up a notable 26% nationwide.

New deliveries in multifamily stock are surging, and single-family construction is also accelerating, but any cost burden relief inspired by new supply is limited by new household formation, which continues at a robust pace. Additionally, homeowner cost burdens are also being driven upward by growing taxes and insurance costs. Ongoing development constraints and the high cost of construction are also weighing on prices.

Read the full report from Joint Center for Housing Studies of Harvard University here.