Is Rent Getting Cheaper in 2024? It’s Complicated

Last week’s report from Harvard’s Joint Center for Housing Studies showed that the market may be cooling, but more people may soon be left without homes.

Though the latter half of 2023 showed cooling rental markets after a pandemic spike, a new report from Harvard’s Joint Center for Housing Studies (JCHS) has peeled back the layers of the United States’ housing crisis, connecting rent affordability with increases in unhoused populations. Published last week, America’s Rental Housing 2024 takes the temperature of recent fluctuations in the rental market, reporting changes in the number of those who are rent-burdened and those who are experiencing homelessness as well as the amount and quality of low-cost rental units.

One of the study’s key findings shows that in 2022 nearly half of American renters were cost-burdened, meaning they were paying 30 percent or more of their incomes on rent alone. Nearly half of rent-burdened people were spending 50 percent of their income on rent. The study also shows that the increase in the number of those who are rent-burdened has increased across income levels.

"Since 2019, cost-burden shares have risen the most for middle-income renter households earning…$45,000 to $74,999 annually," reads the study. "Higher-income households also saw their burden rate increase by 2.2 percentage points."

As rent burdens increase, they leave less money for essentials such as utilities, groceries, and transportation costs, and they can also have future effects on homeownership: A 2018 Pew study found that those who are rent-burdened for at least a year are less likely to buy a home. As the growth in rental demand shifts from Millennials to Gen Z, reads the JCHS study, incomes are not keeping pace with high rental costs: "The median renter household income in 2022 was about $47,000," says the study, "and a significant share of renters have much lower incomes."  

Yet the JCHS study reveals a more immediate impact: Nearly 71,000 additional people became unhoused in 2023, as pandemic-era protections, such as eviction moratoriums and emergency rental assistance, ended—yielding the highest number of unhoused populations on record. Perhaps unsurprising, as those communities with even moderate increases to rental cost burdens tend to see increases in homelessness, according to the National Alliance to End Homelessness.

This could become problematic in cities where "sweeps" to remove people living in unsheltered or semi-sheltered camps have resulted in lawsuits from groups such as the American Civil Liberties Union. And, early this year, the Supreme Court agreed to take up City of Grants Pass vs. Johnson, a lawsuit that will decide if it is constitutional for cities to make such camps illegal.

While the JCHS study reports that the last quarter of 2023 closed with a total of 436,000 new multifamily units built—the highest rate since 1988—the supply of affordable units (defined as those that rent at less than $600 per month) continues to dwindle. Over the past decade, the U.S. has lost nearly 2.1 million such units, including a loss of 230,000 units between 2021 and 2022 alone. The existing rental stock is also older than it has ever been, and exposure to natural disasters and climate change further threatens its longevity; such facts make the case for programs like Pennsylvania’s Whole-Home Repairs Program, a funding stream that began in 2022 to update homes and units owned by income-eligible residents.

Related reading:

Would Blocking Private Equity From Buying Homes Really Fix the Housing Shortage?

Where Do Affordable Housing Experts Think the U.S. Crisis Goes From Here?

Top image: Michael S. Williamson/The Washington Post via Getty Images