Real Estate Marketing & Beyond
Housing cost burdens fell for the third consecutive year, according to the U.S. Census' 2013 American Community Survey. Last year, 39.6 million households spent more than 30 percent of their income on housing, which is a decrease from 40.9 million in 2012 and down from the peak of 42.7 million in 2010.
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However, housing cost burdens are mostly dropping among home owners, while they continue to strain renters, according to a recent analysis by the Harvard Joint Center for Housing Studies of the data. In 2013, 26 percent of home owners were considered burdened by household expenses (i.e.: spending more than 30 percent of their income on housing), compared to half of all renters at 49 percent.
The number of renter households is on the rise, which partially explains why renter cost burdens are escalating, JCHS notes. But this group is also plagued by rising rents that are not matching up to incomes. Median renter costs were up about 5 percent in 2013 compared to 2001, even though median incomes were nearly 11 percent lower, according to the report.
That’s contributed to more renters being “severely burdened” by household costs. In 2013, 11.2 million renters were in this category, meaning they were paying more than 50 percent of their incomes toward housing costs.
“If past patterns hold and income growth remains stagnant, rental costs continue to climb, and affordable ownership stays out of reach, rental cost burdens will only continue to grow,” JCHS researcher Ellen Marya writes on the group's Housing Perspectives blog.
Meanwhile, the number of cost-burdened home owners is dropping. “After surging during the housing bubble, inflation-adjusted owner costs have dropped about 2.5 percent below their 2001 level,” Marya writes. “Owner burdens are also down due to a significant reduction in the overall number of home owners – fully 294,000 fewer households in 2013 than 2012. This decline in the number of home owners for the third straight year suggests that many burdened owners dropped out of ownership, moving into the costly rental market.”
