Econintersect: Many “experts” say that typical households should spend between 29% and 38% of income on housing. Yet a recent study finds that well above 20% of American households are spending more than half their income on housing. And for renters the number exceeded 26% in 2011, the latest year for which data is reported. The numbers come from Housing Landscape 2013, a report by the Center for Housing Policy (CHP) using data from the U.S. Census Bureau and the latest American Community Survey.
Click on graphic for larger image.
Here is a summary of the Housing Landscape 2013 report:
This report focuses on housing affordability for working households. For the purposes of this report, working households are those that report household members working at least 20 hours per week, on average, and earning no more than 120 percent of the median income (AMI) in their area.
There were approximately 44.5 million working households in the United States in 2011, split between homeowners (21.9 million) and renters (22.6 million).
In 2011, approximately one-third of all owner-occupied households met the working household definition; this group typically earned between 50 percent and 120 percent of AMI. Nationally, the median income for working owners in 2011 was almost $42,000, or about 80 percent of the median income for all U.S. homeowners. Due to their lower incomes, working owners faced greater affordability challenges than higher-income homeowners. However, decreasing housing costs have kept affordability somewhat stable for working owners between 2008 and 2011.
On the other hand, working renters represent a majority of all renters; almost 60 percent of all renter-occupied households met the working household definition in 2011. Rising housing costs for working renter households have contributed to worsening affordability between 2008 and 2011.
The degradation in affordability comes from two sources: changes in income and changes in housing costs.
Not surprisingly the cost of housing becomes increasingly burdensome as income decreases.
The map below shows the states with the biggest problems.
Click on map for larger image.
There are five states that have less than 15% of working households with a severe housing cost burden. All are in the north central plains: North Dakota, South Dakota, Wyomiong, Nebraska and Iowa. These are not separately color coded on the map above.
Sources:
Housing Landscape 2013, An Annual Look at the Housing Affordability Challeneges of America’s Working Households (Janet Viveiros and Maya Brennan, Center for Housing Policy, May 2013)
Housing Landscape 2013: More than a quarter of working renter households spend at least half of income on housing (National Housing Conference and Center for Housing Policy, 01 May 2013)
Study: Growing Number of People Can’t Afford to Buy or Rent Their Homes (Brandon Ballenger, Money Talks News, 03 May 2013))
