The Joint Center for Housing Studies (JCHS) of Harvard University recently released its State of the Nation's Housing 2020 report, which includes a thorough analysis of COVID-19’s dramatic impact on the housing market. The JCHS also evaluated changing impacts of discriminatory housing policies on households of color based on fluctuations within the rental and home ownership market.
Home Ownership Market
While home sales halted abruptly when the pandemic initially struck in the spring, they rebounded by the end of the summer, surpassing their 2019 rate. The same pattern held true for new home construction. But as the market made a quick return to prior rates, so did affordability issues: the demand for affordable homes still outpaces the supply, which the JCHS predicts will keep prices high. Even with low-interest rates to help counter the high home prices, many first-time home buyers are still priced out due to costly down payments.
The existing rental affordability crisis was exacerbated by the COVID-19 pandemic. Not only has COVID impacted renters, but smaller scale, non-commercial landlords have also face significant financial strain. Tenants in professionally managed apartments are typically higher income and most (95%) have been able to keep up with their rent payments. However, lower-income tenants usually live in smaller scale apartments owned by “mom and pop” landlords. According to US Census Bureau Pulse Survey data, 13% of North Carolina renters earning less than $25,000 reported being behind on rent in September compared to 21% nationally. As a result, smaller scale landlords are forced to bear the financial burdens of mortgages, taxes and other fees with no rental income to pay those costs.
Job loss, evictions and foreclosures related to COVID-19 have increased housing challenges for people of color, according to the JCHS report, which found that, nationwide, more households of color (43% of Black and 40% of Hispanic households) are housing cost-burdened, compared to 25% of white households. US Census Bureau Pulse Survey data shows significantly more people of color in North Carolina have reported income loss since the pandemic began in March, making it more difficult to secure or maintain housing.
|Race & Ethnicity||% Reported Income Loss|
|Hispanic (Any Race)||58%|
Meanwhile, the JCHS report found that the Black-White home ownership gap continues to grow, barring people of color from a significant wealth development opportunity, and that COVID-19 economic impacts have led to a greater increase in homelessness among people of color, who were already overrepresented in the homeless population.
North Carolina Highlights
A few regional specific trends can be drawn from the State of the Nation’s Housing 2020 report. While JCHS found increasing vacancy rates in rental housing across the country due to COVID-19, it showed that southern rental markets bounced back more quickly as demand for rental housing was revitalized. While this is good for property managers, the news is troubling for renters. The JCHS warns that without reevaluating zoning regulations, rental housing availability and affordability will continue to decline. Most southern jurisdictions do not allow for high density zoning, which the JCHS defined as a key component to increasing supply and lowering housing prices. Another concerning trend is that household wages have not been able to keep pace with the rapidly increasing housing costs. For example, the JCHS report found that households in Charlotte face a significant price-to-income ratio of 4.0.
Subscribe to Policy Matters for more specific North Carolina housing analysis of the State of the Nation’s Housing 2020 in the next several months. Read the full report at State of the Nation’s Housing 2020.