The Harvard Joint Center of Housing Studies has published the State of the Nation’s Housing 2023 report. The annual report notes that millions of households are priced out of homeownership even as the pace of home price growth appreciation slowed. Similarly, the rate of rent growth declined in 2023 even though rents remain elevated beyond pre-pandemic levels.
Major findings in the 2023 report include:
- The growth of home prices has slowed sharply.
- The supply of low-cost rentals has continued to decline.
- Renters’ cost burdens reached record levels.
- Higher incomes were needed to purchase homes.
- Migration was driving population gains and losses.
Housing markets cooled rapidly in 2023. The median sales price for existing homes before the pandemic was $283,000, compared to $375,400 in March 2023. Home prices are not likely to return to pre-pandemic levels in the short term, making the environment much more difficult for first-time homebuyers. Single-family housing construction starts dropped by 10.8% in 2022.
These higher costs pushed homeownership out of reach for many. The number of cost-burdened homeowners increased by 2.3 million to 19 million in 2021, including 8.7 million who were severely cost-burdened. The supply of low-cost rentals continued to decline. Unsheltered homelessness continued to rise in 2022. An estimated 582,460 people were experiencing homelessness on a given night in January 2022, which is a 0.3% increase from 2020.
The growth of home and apartment prices slowed significantly over 2023. Growth in apartment rents slowed from a record 15.3% in the first quarter of 2022 to just 4.5% in the first quarter of 2023, and annual rent growth also slowed over the past year in all 50 markets. Additionally, multifamily housing construction continued to rise in 2022, with 547,000 new multifamily units starting construction in 2022 – the most new constructions started since the mid-1980s.