Mortgages Blog

Finance Blogs » Mortgages Blog » Housing still unaffordable

Housing still unaffordable

By Marcie Geffner ·
Friday, March 4, 2011
Posted: 10 am ET

Home prices have dropped and mortgage rates are still low, yet housing costs continue to become more and more burdensome for many working households, according to "Housing Landscape 2011," a study from the Center for Housing Policy in Washington, D.C.

The report defines "working households" as those in which household members work at least 20 hours a week, on average, and earn no more than 120 percent of the area's median income. There are approximately 46.2 million of these households in the U.S., divided almost evenly between homeowners (23.4 million) and renters (22.7 million), according to the report.

Nearly 23 percent of these households, a total of 10.5 million altogether, spent more than half their income on housing costs in 2009, a level that's characterized as a "severe burden." (2009 was the most recent year of data in the study.)

To take a simplified example, those statistics might work out to an annual household income of, say, $35,000, or $2,916 per month, of which more than $17,500, or $1,458 per month, would be spent on housing costs. That would leave a like amount (or less) to pay for everything else.

The number of U.S. households that fit the definition declined by 1.1 million in 2009 compared with 2008, but the number that were severely burdened by housing costs increased by nearly 600,000 during that time frame, the report states.

The report also includes state- and local-level data, including a breakdown of which U.S. metropolitan areas have the most and least severe housing cost burdens for working households.

The highest-burden list is comprised of three Southern California regions and two Florida regions:

  • Miami-Fort Lauderdale-Pompano Beach, Fla.
  • Los Angeles-Long Beach-Santa Ana, Calif.
  • Orlando-Kissimmee, Fla.
  • Riverside-San Bernardino-Ontario, Calif.
  • San Diego-Carlsbad-San Marcos, Calif.

The lowest-burden list is spread across parts of seven states:

  • Pittsburgh, Pa.
  • Louisville/Jefferson County, Ky.-Ind.
  • Kansas City, Mo.-Kan.
  • Cincinnati-Middleton, Ohio-Ky.-Ind.
  • Raleigh-Cary, N.C.

How much of your income do you spend on housing costs?

Follow me on Twitter: @marciegeff

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.