- Dennis Norman
Recently HUD published a report, “U.S. Rental Housing Characteristics: Supply, Vacancy, and Affordability“, which was packed with data about the rental housing market. The data in the report clearly illustrates that the rental market is holding up pretty well, at least in the lower rent price-ranges, while the for-sale housing market has been getting it’s teeth kicked in.
Vacancy Rates:
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Vacancy rates have increased, reaching 10.6 percent on a nation-wide basis through the second-quarter of 2009 (the most recent period in the report).
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The additional supply however has been mainly higher-priced units.
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From the second quarter of 2008 to 2009, the percentage of vacant rental units with rents of $1,500 or more have climbed from 7.6 percent to 9.3 percent. The share of vacant units with rents below $400 fell from 10.8 percent to 9.3 percent over the same time period.
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Vacancy rates in project-based Section 8 developments have not exceeded 5 percent.
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Properties receiving the Low Income Housing Tax Credit (LIHTC) have “considerably lower vacancy rates than the nation’s overall rental market from 2006 to 2009.”
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Rental Supply:
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Since 2000 LIHTC properties make up about 50 percent of all newly constructed multi-family rental units.
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From 2001 to 2007 the nation’s affordable-unassisted rental housing stock decreased by 6.3 percent, while the high-rent rental housing stock increased 94.3 percent. This translates inot a loss of more than 1.2 million affordable unassisted rental units from 2001 to 2007.
Rents:
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Inflation-adjusted gross rents have risen steadily from a national average of $715 in 1996 to $790 in 2008.
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37.64 percent of US rental households in 2005 spent 35 percent or more of their income on gross rent. IN 2008, this number increased to 37.85 percent.
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