Every year since 2010, fewer than 10% of units have been deemed affordable to renter households that earn 50% of the median renter income, according to a new report released from Freddie Mac.
The “Rental Affordability Reexamined” study found that despite some claims otherwise, affordability levels in the rental sector have not improved in recent years.
Freddie Mac researchers isolated renter income to capture the availability of affordable housing available. That data provides a picture of somewhat worsening affordability in the rental market.
But they discovered how you crunch the data can skew the picture of affordability in the rental market. Other studies have recently shown incomes among renters is increasing. Renter household wages have increased by 2.4% between 2010 and 2018, according to other studies. However, Freddie Mac’s study says that these results may be skewed due to an increase in higher-income households choosing to rent, such as former homeowners with much higher incomes than other renters that are driving up incomes among renters.
Instead, Freddie’s study shows that renters overall have faced a dwindling affordability picture over the last decade.
“Rental affordability continues to be a major issue as demand remains high and supply of affordable housing is both insufficient and more likely to decline than it is to grow,” says Steve Guggenmos, vice president of multifamily research and modeling at Freddie Mac. “Our research demonstrates the need to focus on and understand the complexities of rental affordability as we continue to address the affordable housing crisis in this country.”
Source: Freddie Mac