Seventy four years ago today, July 9, Gwen Guthrie was born in Newark, New Jersey. You might not know Guthrie by name but she would later become a songwriter for some of the best known R&B and soul artists of the 1970s. In 1986, she released what would become the biggest hit of her solo career. You probably know some of the lyrics:
You've got to have a j-o-b
If you wanna be with me
Ain't nothin' goin' on but the rent...
....No romance
Without finance
The song was a smash sensation, peaking in the single digits on charts in the U.S. and the U.K. There was a comedy bit about it in Eddie Murphy Raw and it became a mantra for a generation of women, cementing a legacy that in all likelihood spawned today's viral debates about whether romantic partners should go 50/50.
Guthrie sadly passed away at age 48 but you have to figure that all her financial success made her a head of her household, a key factor the federal government uses to measure the health of the housing market.
Specifically, it's called the headship rate. According to the U.S. Treasury Department, the headship rate is the share of an age group that is a head of household. Naturally, headship rates tend to rise with age; there aren't a lot of 12-year-old heads of household, after all.
But since 1980, headship rates among 25- to 34-year-olds has taken a nosedive. Back then, about half of all Americans in this category made up heads of households; forty years later, by 2020, it had fallen to 40% — the largest decline of all age groups.
The reason is probably obvious: more young adults are living with their parents due to rising rents and housing prices. Here are some more depressing stats about housing affordability trends:
—Let's set aside the fantasy where wages actually keep pace with inflation, the Florida Atlantic University (FAU) Real Estate Initiative tracks a slough of housing data, including where average rents should be based on historical rental cost data. As of May 2024, the average of $2,036, which is 2.61% more than where that average should be (FAU)
—New Haven, Connecticut has the nation's largest "premium" (the percentage above where rent should be) of 7.7% on an average rent of $2,116 a month (FAU)
—Interestingly, the otherwise pricey city of Austin, Texas has the nation's largest "discount" (the percentage under where rent should be). There, in the Lone Star State's capital, the average rent of $1,827 is 3% lower than it should be (FAU)
—In the past 20 years, housing costs have risen faster than incomes. But it's not just big coastal cities that are skewing the numbers. Today, more than 90 percent of Americans live in counties where median rents and house prices grew faster than median incomes from 2000 to 2020 (Treasury Dept.)
—There's more demand for housing than supply. It's actually not because of slow home construction, which has kept pace with population; it's simply because we're living longer so housing inventory isn't turning over fast enough. Thanks, modern medicine!
Oh we can hear our parents now: Just get a roommate and quit your complaining! Well, SpareRoom, a website that matches people looking for someone to split the bills with, reports that roommate rents are seeing historic highs in most metro markets
–Cities historically considered more affordable — where conventional wisdom suggests that having a roomie would help save even more — are seeing the largest jumps in what they call roommate rent (SpareRoom)
—In the 320K-person burg of Riverside, California, average roommate rent has skyrocketed 51% from 2019 levels, to $1,017 a month; rounding out the top five are Phoenix (48%); Las Vegas (43%); Tampa (42%) and San Diego (41%)
— The average size of new apartments in the U.S. is increasing, on average 27 square feet in 2023 compared to the previous year to 916 square feet, according to RentCafe
— In the last decade, apartments in Tuscon, Arizona have grown the most, by 246 square feet (RentCafe)
—However, several cities are seeing a reverse trend. In fact, the city where apartments have shrunk the most in the past 10 years — 141 square feet — is Birmingham, Ala. (RentCafe)
