The 2023 AHS – 50 Years of Great Data, Ready for the Next Generation of Great Researchers

The 2023 AHS – 50 Years of Great Data, Ready for the Next Generation of Great Researchers

Todd Richardson, General Deputy Assistant Secretary, Office of Policy Development and Research
Samuel Risley, Social Science Analyst, Office of Policy Development and Research

In 1973, HUD's Office of Policy Development and Research partnered with the U.S. Census Bureau to collect the most comprehensive data on housing in America in what was then called the Annual Housing Survey and now is known as the biennial American Housing Survey (AHS). A terrific short history of the AHS written by George R. Carter III, director of PD&R's Housing and Demographic Analysis Division, appeared in a recent edition of PD&R Edge.

In September, we released the 2023 AHS data, which are incredibly important as we consider how to respond to our current housing crisis — an inadequate supply of units affordable for low-income renters and first-time homebuyers. We want to challenge housing researchers to maximize the value of the AHS by taking the following actions:

• Using the AHS to examine how America's housing has evolved over the past 50 years. Researchers might consider using AHS historical data to identify past policies that are worth exploring to address our current crisis. From the AHS landing page, users can link to the Data section of the site, where they can find the Public Use Files for every year since 1973 as well as the reports created using the data. Read the Technical Documentation to learn how to use the data.

• Using the AHS panel design. The current AHS has followed up on the same homes in 2015, 2017, 2019, 2021, and 2023. This period has been particularly volatile for America's housing markets, and linking responses for the same homes over time can illustrate these changes in the housing market. The best example of such linking (and how to accomplish it) was for the panel that ran from 1985 to 2013 that former PD&R Assistant Secretary John Weicher completed. Weicher's analysis drew this conclusion for change between 1989 and 2013 using the panel data:

• "Filtration – the movement of moderate or high rent units into the affordable category – exceeded gentrification – the loss of affordable units to the moderate or high rent categories – between 1985 and 2013. Filtering added 4.6 million units to the affordable rental inventory and gentrification removed 1.7 million, for a net contribution of 2.9 million units to the affordable rental housing stock.

• Another important source was the shift of units from the owner sector to affordable rentals. About 3.8 million units that were in the owner sector in 1985 became affordable rental units by 2013, while 1.8 million affordable rental units as of 1985 were in the owner stock in 2013, for a net contribution to the affordable rental stock of just under 2.0 million units."

The pattern Weicher described above likely was the result of the foreclosure crisis of 2009 to 2011. We suspect that AHS data may reveal that the pattern reversed from 2015 to 2023.

We invite you to browse the research others have done here and to submit your own work for addition to the AHS research bibliography. 

We also make single-year data easily accessible through the AHS Table Creator. In this post, we have used the Table Creator to investigate numerous topics, including the following:

• Exploring rent and owner cost changes to explain why the median renter paid more than the median homeowner in total housing costs in 2023. We explore contract rent changes since 2019 by when renters moved into their units; mortgage payments by when owners moved into their units; changes in renters' utility costs; and changes in owners' property taxes, hazard insurance costs, and utility costs.

• For a snapshot on a current hot topic, we explore recent trends in solar installations and what share of homeowners, by income, have installed solar panels.

• How the vacant inventory has changed since 2019. The number of vacant units fell by 3.3 million between 2019 and 2023, a reduction of 24 percent. Where did they go?

The following discussions are based on simple crosstabs made with the AHS Table Creator and are intended to inspire readers to do the same. 

Renter and Owner Housing Cost Change, 2019 to 2023

In 2023, the median renter paid more per month in housing expenses than the median homeowner. AHS data are collected from May to September of the survey year; therefore, when we talk about "change," we tend to think of that change as being from July of one year to July of the following year (July being in the middle of the survey period).

Within that context, between 2019 and 2023, national median monthly housing costs increased as follows:

• From $1,137 to $1,355 for owners, or 19 percent over 4 years (averaging 4.8% annually).

• From $1,017 to $1,391 for renters (excluding renters with no cash rent), or 37 percent over 4 years (averaging 9.2% annually).

At a high level, between 2019 and 2023, the number of renters grew by 4 percent and the number of homeowners grew by 9 percent. In general, this growth represents an increase in total occupied housing units of 10.4 million over 4 years, an annual average of 2.6 million newly occupied housing units. Single-person households made up 51 percent of this growth.

During this 4-year period, the annual household growth rate was more than twice the annual rate between 2011 and 2019. In the 8 years between 2011 and 2019, 9.259 million households were created, an average rate of 1.15 million per year. From 2011 to 2019, roughly 40 percent of this growth came from single-person households.

The accelerating growth of single-person households has reduced the average household size, requiring more housing per capita and thus increasing pressure on the housing supply.

Where did the units households are now occupying come from? As discussed below, in 2019 the United States had a reserve inventory of existing homes — that is, vacant homes — of 13.7 million. In 2023, this reserve had declined by 3.3 million homes. The remaining units were newly built. As has been widely reported, the first wave of demand came from new homebuyers, and new home prices rose rapidly; this price spike was followed by an acceleration in rental costs in 2021 and 2022.

The increases in home values and rents impacted renters and homeowners very differently; and the effects on people within those groups varied depending on when they moved into their home.

Renters

Renters are highly mobile. Roughly one-third of renters move every 2 years. As table 1 shows, as of September 2023, 55 percent of renters had rented their home or apartment since January 2020.

Table 1. Number and percentage of renters by year moved in

*For AHS 2021. For AHS 2023, this period is from January 2020 to December 2021.
**For AHS 2019, this period is from January 2016 to September 2019. For other years, this period is from January 2015 to December 2019.
***For AHS 2019, this period is from January 2010 to December 2015. For other years, this period is from January 2010 to December 2014.

As table 2 shows, contract rents (meaning rent paid to the owner, exclusive of tenant-paid utilities) for newly rented units are much higher than those for tenants who have not moved. Renters who leased their unit before January 2020 are paying 80 percent or less of the rent that tenants who leased up from January 2022 pay. Median contract rent for all renters has risen by 32 percent since 2019 (averaging 8 percent annually), but that rise has been driven largely by the movers. Median rent for renters who moved into their unit between 2010 and 2020 (roughly 35 percent of renters) saw contract rent growth of less than 13 percent, or roughly 3 to 4 percent per year.

Table 2. Median monthly contract rent by year moved into unit

*For AHS 2021. For AHS 2023, this period is from January 2020 to December 2021.
**For AHS 2019, this period is from January 2016 to September 2019. For other years, this period is from January 2015 to December 2019.
***For AHS 2019, this period is from January 2010 to December 2015. For other years, this period is from January 2010 to December 2014.

Table 3 shows that 90 percent of renters pay some or all of their utilities outside of their contract rent (the most common such utility is electricity), and for those renters, median monthly utility payments were roughly 15 percent more in July 2023 than in July 2019, an annual increase of nearly 4 percent. Roughly half of renters pay renters insurance, and those rates do not appear to have increased for the median renter that pays for insurance.

Table 3. Median renter non-rent costs per month

Owners

Most homeowners have benefited from low-interest, fixed-rate mortgages to protect them against housing cost inflation, and thanks to sharply increasing home values, most of these homeowners have, at least on paper, significant home equity. Accompanying these increases in home values have been concurrent increases in property taxes and property insurance. New homebuyers in 2023 faced a difficult environment of high housing values and high interest rates.

The United States has 86.9 million homeowners, of which 47.6 million (roughly the same as the number of renters in the United States) have a mortgage. That is, just 55 percent of owners have a mortgage. Other owners may not contend with a mortgage payment but do need to afford increases in property taxes, hazard insurance, and utilities. The following tables focus on the 47.6 million of homeowners with a mortgage.

Homeowners with a mortgage are far less likely to move than renters. Table 4 shows that 29 percent of owners with mortgages moved into their home between January 2020 and September 2023. A higher share of homeowners — 31 percent — have been in the same home for more than 13 years.

Table 4. Homeowners with a mortgage by year moved into home

*For AHS 2021. For AHS 2023, this period is from January 2020 to December 2021.
**For AHS 2019, this period is from January 2016 to September 2019. For other years, this period is from January 2015 to December 2019.
***For AHS 2019, this period is from January 2010 to December 2015. For other years, this period is from January 2010 to December 2014.

Most owners with a mortgage have benefited from the historically low mortgage interest rates that were prevalent before 2021, when rates began to increase. Most homeowners have fixed-rate mortgages with 10-,15-, or 30-year terms, which allow them to refinance when rates fall while keeping the lower rate when rates rise (table 5). In 2019, the median interest rate for all mortgagees was 4 percent. Refinancing that occurred between 2019 and 2021 lowered the median to 3.5 percent in 2021, where it has remained even though rates have since risen.

Table 5. Median mortgage interest by year moved into unit

*For AHS 2021. For AHS 2023, this period is from January 2020 to December 2021.
**For AHS 2019, this period is from January 2016 to September 2019. For other years, this period is January 2015 to December 2019.
***For AHS 2019, this period is from January 2010 to December 2015. For other years, this period is from January 2010 to December 2014.

These low rates greatly benefit homeowners. As table 6 shows, the median mortgage payment increase for most homeowners who moved into their homes in 2021 or earlier is less than 1 percent per year; a sharp contrast to the increases renters experienced, even those who also did not move.

That noted, more recent homebuyers pay much larger monthly mortgage payments than earlier homebuyers, largely because of the higher purchase prices newer homeowners paid. 

Table 6. Median Mortgage Payment (excluding taxes and insurance) by year moved into unit

*For AHS 2021. For AHS 2023, this period is from January 2020 to December 2021.
**For AHS 2019, this period is from January 2016 to September 2019. For other years, this period is from January 2015 to December 2019.
***For AHS 2019, this period is from January 2010 to December 2015. For other years, this period is from January 2010 to December 2014.

However, since 2019, all owners, with or without a mortgage, have experienced substantial increases in their property taxes (26%), property insurance (30%), and utility costs (22%), as table 7 shows. Although rising home values have increased homeowners' equity (see table 8), they also result in higher assessed values that lead to higher property taxes. Many owners have also seen increases in their hazard insurance costs as insurers contend with higher costs to repair and replace homes along with rising claims for various hazards. Utility costs for owners have risen by roughly 6 percent annually, more than for renters. 

Table 7. Other owner cost medians for all homeowners

Home equity is a major source of personal savings. Table 8 shows that the median home value as reported by homeowners has increased a startling 52 percent between 2019 and 2023. With homeowners paying down their mortgages rather than refinancing and with home values increasing substantially, we estimate that the median homeowner has 75 percent equity in their home, equating to $262,266. (This statistic includes the 45 percent of homeowners that have 100 percent equity in their homes because they have no mortgage.)

Table 8. Estimated homeowner median equity

*Formula for this estimate: ((Owner Median Value*Total Owners)–(Owner Median Amount Owed on Mortgage*Owners With a Mortgage))/Total Owners.

Solar Installation

Since 2017, when the AHS started collecting information on solar panel installation, the number of U.S. homes with solar panels has more than doubled, from 3.1 million to 6.8 million. Figure 1 shows a 38 percent increase in the number of homes with solar panels during the past 2 years alone. Nationally, 5 percent of U.S. homes have solar panels.

Figure 1. U.S. Homes with residential solar installations, 2017 to 2023

Figure 2 shows, not surprisingly, that higher-income households have a higher rate of solar installation. Figure 2 represents solar installation data through roughly January 2023. As figure 1 indicates, installation rates have increased rapidly, likely spurred on by the tax credits available under the Inflation Reduction Act, but have not yet had the impact of the U.S. Department of Energy's Solar for All grant program.

Figure 2: Percentage of owners with installed residential solar by income category, 2023

Vacant Housing

The U.S. housing market requires some level of vacancy to run smoothly. People need to move for many reasons, and they need to have some place to live after they move. The balance, however, is delicate. Too much vacancy can lead to blight; too little results in homelessness. According to the AHS, in 2019, the United States had approximately 13.7 million vacant homes, or approximately 10 percent of all U.S. housing units, "in reserve." Some of these vacant units were available — meaning that they were listed for rent or for sale — and others had been sidelined for one reason or another. 

Between 2019 and 2023, the number of vacant housing units in the United States declined by 3.3 million units, a reduction of 24 percent in the nation's reserves (table 9). In general, this reduction in the reserves was observed in every structure type except multifamily properties with 50 or more units, where the number of vacant units — approximately 1.2 million — increased slightly between 2019 and 2023.

Table 9: Vacancy by structure type, 2019 – 2023 (in thousands)

*Significant at a 90% confidence interval.

Approximately half of the decline of housing reserves was attributable to the obvious source: homes for sale and homes for rent. In 2021, this drawing down of reserves pushed down vacancy rates and pushed up prices for owner units. The rise in home prices not only drew on homes for sale but also caused some single-family homes that formerly had been rentals to become owner occupied. On the rental side, the dual impact of falling vacancy rates and fewer single-family rental units pushed rents up dramatically in 2022. 

The other half of the reduction in the number of vacant houses comes from homes that we record in the AHS either as an occasional use property or as part of the mysterious "other vacant" category. Higher asking rents and higher sales prices led approximately 1.5 million of these units to change to occupied status.

The AHS gets data on the duration of vacancy by asking respondents how many months the unit has been vacant. The changes in the distribution of this question from 2019 to 2023 show that there is not a statistically significant change in the percentage of units that have been vacant for less than 2 months (table 10). However, the percentage of vacant units that have been vacant for "2 up to 6 months" has significantly decreased. We also have observed increases in the percentage of units vacant for "6 months up to a year," "1 year up to 2 years," and "2 years or more." These homes may be remaining vacant for reasons such as poor quality, undesirable location, or tenants being drawn to newer vacancies.

Table 10: Distribution of duration of vacancy excluding missing values in 2019 and imputed values in 2023

*Significant at a 90% confidence interval.

The reasons why owners have extra units offer additional insights. The most common reason respondents gave for owning extra units, at approximately 47 percent, was for recreational purposes (table 11). Another common reason cited was for investment purposes (12.4%), an increase of 3.6 percent from 2019. The share of respondents who owned extra units because they were unable to sell the properties decreased slightly, further demonstrating that no shortage in housing demand exists.

Table 11: Distribution of extra units owned

*Significant at a 90% confidence interval.