Don’t just plan for housing, plan for the market.” Mitchell Silver shared this message at the Housing Summit; a message that resonated throughout the audience. The message is simple: to fully understand the issue of affordable housing and its solutions, it is critical to understand the diversity and complexities of the local population in which you serve.

The Joint Center for Housing Studies of Harvard University recently released The State of the Nation’s Housing 2013, a periodic assessment of the nation’s housing outlook that summarizes important trends in the economics and demographics of housing. The data and resources presented in the report align with Mitchell’s directive, and provide a clear descriptive of who’s in the housing market.

Rate of homeownership does not reflect population growth.
The number of adults (18 and older) jumped 18.1 million from 2005 to 2012, and 2.4 million from 2011-2012; this number was fueled by the booming number of adults in their mid-20’s, what appears to be the ideal age to start a new household. But while the young adult population is growing, the rate of homeownership among this demographic is on the decline. One out of every two 30-34 year-olds are the head of a household, compared to one in four 20-24 year-olds.

Income is a key factor in the housing recovery.
Income has a direct impact on the housing market by restricting how much people can afford in rent or mortgage costs. In 2011, the median household income fell to 8.1% below the 2007 peak; with the exception of seniors, incomes fell across all age groups, with the greatest drop among younger households. The median income for African-American households fell to 12%, twice as much as the median for white households. Households between the ages of 35 and 54 have witnessed a dramatic decrease in income, which are currently lower that those forty years ago.

Homeownership among seniors on the rise.
While national homeownership rates have declined, rates among households aged 65 and older reached the highest level on record. These high rates helped negate the decline of the national level.

Homeownership among minorities is declining.
At 43.9%, the homeownership rate for African-Americans is at its lowest level since 1995. Both the Hispanic homeownership rate (46%) and the white homeownership rate (73.5%) are at their lowest values in a decade. These new rates represent a widening gap between minority-white homeownership.

Mitchell’s message of understanding the market creates opportunities. It allows a better approach to soliciting funders and community support; provides a foundation for securing government buy-in at the local and state level; and ensures appropriate housing is built to meet the demand. Ultimately, it increases the stock of affordable housing available to community members who need it the most.