Rent prices for affordable housing units climbed +0.8% to $986 in Q2 2021 while the vacancy rate for affordable housing dropped ever so slightly to 2.5%.
Rent Prices for Affordable Housing Units Continued Climbing in Q2 2021
During Q2 2021, the national average asking rent in affordable housing units increased +.8% to $986. Moody’s Analytics is projecting that by the end of 2021, rents will increase to $996 in this affordable housing sector for a bump of +2.2% y/y.
David Caputo, an analyst with Moody’s, said that the increase in affordable housing sector rent prices is a sign that this sector is “well on its way” to a full recovery from pandemic-effects.
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Vacancy Rate for Affordable Housing Declining
During Q2 2021, the vacancy rate for low-income tax credit-supported affordable housing dropped slightly to 2.5%, a decline of just -0.1% from Q1, according to Moody’s Analytics. (Historically, the vacancy rate for affordable housing rates between 2% and 2.6%.)
With the annual median house price soaring +16.2% from August 2020 to August 2021, it’s no wonder the vacancy rate for affordable housing has declined. More and more lower income and potential first-time homebuyers are being squeezed out of the homebuying market.
Incidentally, more and more Congressional Democrats are becoming increasingly wary of that squeeze and have begun crafting legislation to help first-time, first-generation homebuyers by proposing a low fixed-rate 20-year mortgage through the Department of Housing and Urban Development.
New Affordable Housing Came to Market in Q2 2021
4,500 new affordable housing builds came to market in Q2. These new units marked an uptick of +0.4% within the supply of affordable housing. Moody’s Caputo said, “Since history has shown us that fourth quarters are usually the strongest quarter for construction, 2021 is still projected to finish with 40,000 completions, which falls right in line with years past,” despite supply and labor shortages.
Thanks to Moody’s Analytics and HousingWire.
