Rising Home Sale Prices and the Risk of Renter Displacement
Understanding quickly changing local housing market data is essential as local officials plan to ensure affordable housing opportunities in their communities. PolicyMap can help.
According to Zillow, home sale prices across the nation have risen 19.6% over the last year and are forecasted to increase another 16.4% over the next 12 months. For homeowners, this has driven a tremendous increase in household wealth. Some homeowners have sold their home for a profit, some have drawn down on home equity to pay other expenses, and some are just sitting on an asset with increasing value. For renters, however, the magnitude of these home sale price increases only pose a threat. Buying a home is increasingly out of reach for moderate income households. Landlords can raise rents to reflect the more expensive housing market around them or choose to sell their properties. In the end, the number of available affordable rental units declines. And, for places with a high percentage of renters already burdened by the cost of renting, many renters will be forced to move and displaced.
According to the most recent quarterly home sale data from Moody’s Analytics, almost every county in the nation has experienced an increase in home sale prices and, for some, the growth has been extreme. All counties in the map below, but for a couple in northern Louisiana, have growing home sale prices. Those in the darkest purple have increased by over 18% between Q32020 and Q32021.
If we dig deeper into Florida and Georgia, for example, we can isolate those counties where home sale price increases have been extreme (in excess of 18%) during this time period and see that most counties in these two states fall into this category.
Further identifying which of these counties have both high percentages of renters and high percentages of renters already spending more than 30% of their income on rent, can highlight those places where affordable rental opportunities and displacement will become a concern if it isn’t already.
In Alachua County, home to Gainesville, FL for example, over 53% of renters are already struggling with rent payments, and home sale prices have increased over 19% over the 12 month time period.
Understanding where affordable housing may be most under pressure is essential for housing practitioners as they create affordable housing solutions for their communities.
Want to see how data in your community can shape affordable housing strategies? Read about NYU Furman Center’s partnership with PolicyMap on a Housing Needs Assessment Tool designed to save local practitioners time and money when creating their local housing strategies, or contact us for a personalized demo.