More Americans Squeezed by Housing Costs
More Americans Squeezed by Housing Costs. Image courtesy of renjith krishnan/ FreeDigitalPhotos.net
Housing costs remain near record highs, with more than 35 percent of Americans spending 30 percent or more of their incomes on rent or mortgage payments, according to a new study by Harvard University’s Joint Center for Housing Studies. What’s more, 50 percent of renters are considered “cost-burdened,” spending 30 percent of their incomes on housing expenses, while 28 percent are “severely” cost-burdened, spending half of their incomes on housing.
Economists often consider housing expenditures of more than 30 percent of a person’s income as representing a financial burden.
Households in California are devoting some of the largest portions of their budgets to housing expenses, the report found. About half of households in the metro Los Angeles area spend at least 30 percent of their income on rent or mortgage payments, the highest rate out of 381 metros measured, according to the report. In fact, one in four households in Los Angeles spend at least half of their income on housing.
Rental costs and home prices have been growing faster than incomes in several pockets of the country, but the affordability crunch seems to be most evident in Southern California. The Harvard study found that seven of the 10 metros with the highest share of “cost-burdened” households were located in California, including Inland Empire, San Diego, and Ventura County.
“Pretty much all other necessity spending is getting crowded out,” Dan McCue, research manager at the Harvard Joint Center for Housing Studies, told the Los Angeles Times. “Food, clothing, healthcare, you name it. There’s just less to go around.”
Source: Harvard University’s Joint Center for Housing Studies and “Housing Costs Are a Greater Burden in LA Than Elsewhere,” The Los Angeles Times (June 25, 2014)
