More and more, America’s workforce is struggling to find comfortable, safe, and convenient housing that it can afford. As the homeownership rate has fallen, demand for apartments has grown, but supply has failed to keep up.
What’s the result? A sharp rise in rents, a surge in rent-burdened households, and a daily struggle for millions of Americans unable to find a decent place to call home.
A changing world
The way that the country’s workforce lives has changed significantly in recent years. Once, working American families lived primarily in single-family homes that they owned. People spent their whole lives in the same neighborhood, working a steady job at a local business. Back then, owning a single-family home was an affordable and commonsense option.
Not today. Steady jobs are harder to find and household income has been relatively stagnant since 1999 (Figure 1). Manufacturing jobs have headed offshore, making the Rust Belt less economically appealing, and most new jobs are being created on the coasts or in the Sunbelt, where housing is often more expensive.1
Thus, today’s American workforce needs greater flexibility and improved affordability in their housing options. For many, renting is a logical choice.
More renters, higher rents
As the economy has evolved, renting has become increasingly common. Over the last decade, the number of renters in America grew by over 9 million, while the number of homeowners grew by less than 500,000.2 Almost all new households formed since 2005 have been renter households.2 Various factors are driving this growth in renters (Figure 2). The housing market crash of 2007 and the subsequent recession lead to millions of Americans losing their jobs and homes. Between 2007 and 2015, an estimated 9.4 million homes were lost to foreclosure, short sales, and deed-in-lieu of foreclosures. Then, in the wake of the financial crisis, banks tightened lending standards, making mortgages harder to obtain, especially for those with less-than-perfect credit.
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