The housing market may be hotter than ever, but not everyone is reaping the benefits.
A report Harvard University’s Joint Center for Housing Studies (JCHS) released on June 16 found that inequalities that existed before the pandemic are persisting and policymakers need to take action to ensure those affected don’t fall even farther behind.
The “State of the Nation’s Housing 2021” report shows home prices are skyrocketing in most markets — past levels reached before the housing bubble popped in 2008 — but that this tide is not lifting all boats, a fact made worse because so many households are at risk and losing any wealth that could help them enter the market.
“Households that weathered the crisis without financial distress are snapping up the limited supply of homes for sale, pushing up prices, and further excluding less affluent buyers from homeownership,” the report’s introduction reads. “At the same time, millions of households that lost income during the shutdowns are behind on their housing payments and on the brink of eviction or foreclosure. A disproportionately large share of these at-risk households are renters with low incomes and people of color.”
On Wednesday, Harvard hosted a panel of industry experts and innovators to discuss the report. Panelists addressed everything from federal plans to support homeowners and tenants to how local governments can respond to these issues and the urgency of increasing diversity in homeownership.
The report shows that during COVID-19, 24 percent of households with less than $25,000 in income were behind on their rent or mortgage, compared with 17 percent of households earning $25,000 to $49,999 and just 4 percent of households making more than $100,000. Panelists noted that this shows vulnerable households were the most affected during the pandemic and that these households were disproportionately people of color.
“We’re living in a very unaffordable market … you have to have a significant income and significant savings to get into homeownership,” said Chris Herbert, managing director of JCHS. “So what I worry about is we’ve got pricing levels now that are really going to push a lot of people out of the market, particularly people of color who don’t have a family history of homeownership and don’t have that wealth to draw on.”
On the connection between economic and housing stability and race, National League of Cities CEO and executive director Clarence Anthony talked about how cities can support vulnerable communities and keep families in their homes.
“We have to be creative, we have to be responsive, and we have to and must have a partner in the federal and state government as well as community-based organizations,” he said. “This is a tough time, and I’m so glad this report is highlighting the challenges, because only if we acknowledge that we have this challenge will we come together and address it, and this is our time to do that.”