JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY reports
The Baby Boomers No Longer Dominate
the New Home Market because of
THE INCREASING PREVALENCE OF COST BURDENS.
The recession took a toll on household incomes but did little
to reduce housing outlays for many Americans. Between 2007
and 2010, the number of US households paying more than half
of their incomes for housing rose by an astounding 2.3 million,
bringing the total to 20.2 million
.
While renters accounted for the vast majority of the increase, the number of
severely cost-burdened owners also rose by more than 350,000
as many households locked into expensive mortgages were
unable to refinance. Moreover, the recent jump in the number 
of severely cost-burdened households comes on top of a 4.1 million
surge in 2001–7.
For households paying large shares of income for housing, making
ends meet is a daily challenge. Among families with children
in the bottom expenditure quartile, those with severe housing
cost burdens spend about three-fifths as much on food, half
as much on clothes, and two-fifths as much on healthcare as
those living in affordable housing. Providing assistance to costburdened
households not only helps to ensure a decent place
to live, but also frees up resources to meet life’s other necessities.
In addition, affordable housing makes it more feasible for
low-income households to set aside some savings as a cushion 
against emergencies or as an investment in education, business,
or other advancement opportunities.
But the prospects for meaningful reduction in housing cost burdens
remain bleak. As more renters than ever before struggle to
pay for housing, the federal response has been limited. Funding
for the Housing Choice Voucher Program, one of the principal
sources of rental housing assistance since the early 1990s, has
increased only modestly since the recession. But with renter
incomes falling and rents rising, the amount of assistance
needed per renter has climbed—making higher funding imperative
just to serve the same number of recipients.
At present, the only significant growth in subsidized rental
housing comes through the Low Income Housing Tax Credit 
(LIHTC) program, which continues to add about 100,000 affordable
units each year. Still, only about a quarter of very lowincome
households receive assistance. If calls for significant
cuts to domestic spending (including the voucher program) or
to financial support provided through the tax code (including
LIHTC) are successful, the nation would move even further
away from its longstanding goal of ensuring decent, affordable
housing for all Americans.
THE ROAD AHEAD
With moderate gains in multifamily construction, improving
sales of existing homes, and modest increases in single-family
starts, housing should make a stronger contribution to economic
growth in 2012 than it has in years. But while the rental
market rebound is on track, the owner-occupied market still
faces a number of pressures that may make the turnaround
more muted than in recent cycles.
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