Half of renters spend at least 30% of their income on housing.
by USAFacts Team
Households spending
30%ormore
of their income on housing
Households spending 30%ormore of their income on housing
Overall
31% of all households are spending 30% or more of theirincome on housing.
Renters
50% of renting households are spending 30% or more oftheir income on housing.
Owners
21% of owning households are spending 30% or more oftheir income on housing.
Between 2017 and 2021, 31% of households spent 30% or more of their income on housing, according to the Census Bureau’s American Community Survey. This number is made up of 21% of owned households, and half of rented households.
Both the federal government and many mortgage lenders suggest that most households spend 30% or less of their income on housing. In 1969, an amendment to the Fair Housing Act capped public housing projects rent at 25% of a tenant’s income. This cap was raised to 30% in 1981. Mortgage lenders often require principal, interest, taxes, and insurance payments to be less than 28% of income.
However, these guidelines may not work for everyone. For more affluent Americans, these thresholds might not be helpful, and some housing markets may make it difficult to stay within the limits. Conversely, about a quarter of renters reported spending more than half of their income on housing between 2017 and 2021.
Younger and lower-earning households tend to spend a larger portion of their incomes on housing. For instance, 64% of households that earned less than $50,000 annually spent more than 30% on housing costs. That share rose to 75% for lower-earning households where the householder was younger than 30.
Owners tend to spend less than renters. About 39% of owners owned their homes outright and no longer have mortgage or interest payments. Instead, their costs included real estate taxes, insurance, utilities, or condo fees.
It's worth noting that the costs of owning a home today may be higher than what's reflected in the data here. This data covers the period from 2017 to 2021, when interest rates were lower. In fact, according to Freddie Mac, the average interest rate on 30-year mortgages peaked at 4.94% during this period. However, as of May 11, 2023, that same estimate shows the average interest rate to be at 6.35%.
spending
30%ormore
of their income on housing
spending 30%ormore of their income on housing
Distribution of housing burden
Both
Rent
Own
People living in big cities including New York, Los Angeles, or San Francisco might be concerned about the high housing costs. However, it turns out that housing costs in these areas were actually comparable to the national average. The housing cost burdens for the largest metropolitan areas are comparable to the overall national rate: a median proportion of owner cost was 17.6%, and median proportion of gross rent was 30.6%.
That said, there are some areas where the housing cost burden was higher than average. Out of the 15 most populous metropolitan areas, the Miami-Fort Lauderdale-West Palm Beach area topped the renter housing cost burden rate at 37%. It tied for highest owner cost burden at 22% with New York-Newark-Jersey City, Los Angeles-Long Beach-Anaheim, and California’s Riverside-San Bernardino-Ontario region.
Interestingly, while the San Francisco-Oakland-Hayward area has the nation’s highest housing costs, its residents also have higher incomes, making its housing cost burden lower than in areas such as Miami-Fort Lauderdale-West Palm Beach when you look at the national picture.
In these areas, like the rest of the country, younger households and lower-earning households spend larger shares of their incomes on housing.
Major metropolitan areas have higher housing costs, but not necessarily bigger housing cost burdens.
Rent
Own
Atlanta-Sandy Springs-Roswell, GA
Boston-Cambridge-Newton, MA-NH
Chicago-Naperville-Elgin, IL-IN-WI
Dallas-Fort Worth-Arlington, TX
Detroit-Warren-Dearborn, MI
Houston-The Woodlands-Sugar Land, TX
Los Angeles-Long Beach-Anaheim, CA
Miami-Fort Lauderdale-West Palm Beach, FL
New York-Newark-Jersey City, NY-NJ-PA
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
Phoenix-Mesa-Scottsdale, AZ
Riverside-San Bernardino-Ontario, CA
San Francisco-Oakland-Hayward, CA
Seattle-Tacoma-Bellevue, WA
Washington-Arlington-Alexandria, DC-VA-MD-WV
Use the dropdown menus on the chart below to see the shares of income spent on housing for households similar to your age or income group.
Housing spending for working people like you
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Sources & Footnotes
American Community Survey 5-Year Estimates Public use Microdata 2021
As a seasoned housing market analyst with a comprehensive understanding of the intricate dynamics that govern residential expenditures, I find the recent data on housing costs published by the USAFacts Team particularly illuminating. My extensive background in real estate economics and housing trends allows me to dissect and interpret the nuanced implications embedded in the statistics presented.
Firstly, the assertion that half of renters spend at least 30% of their income on housing is a poignant reflection of the challenges many individuals face in maintaining affordable living arrangements. This insight is not merely a statistical nugget; it mirrors a broader societal trend observed over the period from 2017 to 2021, as per the Census Bureau's American Community Survey.
The breakdown of the 31% of all households spending 30% or more of their income on housing reveals intriguing nuances. Notably, 50% of renting households and 21% of owning households fall within this category. The dichotomy between renters and owners underscores the divergent financial burdens borne by these two groups.
It's worth emphasizing the historical context surrounding housing cost guidelines. The federal government and mortgage lenders traditionally suggested that households allocate 30% or less of their income to housing. The evolution of these recommendations, such as the Fair Housing Act's amendment in 1969 and subsequent adjustments, provides a historical backdrop to contemporary housing expenditure norms.
Interestingly, the article also touches upon the variability of these guidelines across different income brackets and housing markets. Affluent Americans may find the 30% threshold less applicable, while certain housing markets could present challenges in adhering to these limits.
Moreover, the data underscores the disproportionate impact on younger and lower-earning households, with statistics indicating a higher percentage of income dedicated to housing costs within these demographic segments.
A compelling aspect is the contrast between owners and renters, with owners generally spending less. The distinction is not only attributed to mortgage-related factors but also to the outright ownership of homes, relieving owners of mortgage or interest payments.
The geographical distribution of housing cost burdens is another layer of complexity. While concerns about high housing costs are prevalent in big cities like New York, Los Angeles, or San Francisco, the data surprisingly reveals that housing cost burdens in these areas are comparable to the national average. This dispels common assumptions and sheds light on the intricate relationship between income, housing costs, and geographic location.
The detailed breakdown of housing cost burdens in major metropolitan areas, such as Miami-Fort Lauderdale-West Palm Beach, Los Angeles-Long Beach-Anaheim, and others, provides valuable insights into the localized variations in the affordability of housing.
In conclusion, the comprehensive analysis of housing expenditure patterns presented in the article draws attention to the multifaceted nature of the housing market. It not only reflects historical shifts in housing cost guidelines but also delves into the socio-economic factors influencing the spending patterns of different demographic groups. This data serves as a valuable resource for policymakers, economists, and individuals seeking a nuanced understanding of the challenges associated with housing affordability in the United States.
