Housing report explores escalating affordability crisis for homeowners and renters

The Harvard Joint Center for Housing Studies (JCHS) recently published its State of the Nation’s Housing 2024 report, highlighting continually rising housing costs and the number of cost-burdened homeowners and renters hitting record highs. The results tell us that the housing crisis remains urgent, with some small silver linings. First, housing costs remain high in both the for-sale and for-rent markets. The number of cost-burdened homeowners peaked at 19.7 million with households spending over a third of their income on housing and utilities. Furthermore, barriers remain to constructing new housing units. Builders face high interest rates and labor and material costs, making it difficult to start and complete new housing projects. This means there is not an effective path for communities to build their way out of this crisis. 

However, the report did have some good news. Rental vacancies are on the rise as rental rates stall. Rents are still rising in smaller metros with area populations of less than one million, but prices have stalled nationally. Additionally, despite the woes in the construction industry, single-family unit production increased over the past year. 

Even with some small signs of progress, the state of housing remains bleak as increasing costs, and a lack of development puts housing stability out of reach for large swaths of the country. Recent MARC research shows that across the Kansas City region, the recovery from the Great Recession and the pandemic has been slower than peer metros and building permitting has continued to decline since 2020. This trend combined with decreasing vacancy rates, large quantities of investor-owned properties increasing competition, and larger economic forces are contributing directly to the fast rise in cost-burdened households. JCHS reports that this is particularly troubling for renters in the metro, 45.8% of which are cost burdened. 

Throughout the Kansas City region, median home prices are four to five times higher than incomes, a stark contrast to 2016 and prior when Kansas City’s price-to-income ratio was less than 3:1. Kansas City is losing its long boasted competitive edge in housing affordability and incomes are not keeping up. The State of the Nation’s Housing report supports that Kansas City isn’t the only area experiencing extremely high housing costs for both renters and homeowners, and while there have been recoveries in some markets, overall people are spending more of their incomes than ever on housing costs.