Low income households, both renters and homeowners, are struggling during the worst housing downturn in more than 60 years, according to the State of the Nation’s Housing: 2009 report released by the Joint Center for Housing Studies of Harvard University on June 22. The study shows that low income minority households are under particular pressure in the difficult housing market as they are more likely to be unemployed, spend more than half of their incomes on housing, and live in neighborhoods with higher rates of foreclosure and steeper depreciation in home values.
NLIHC President Sheila Crowley was among the speakers at the release of the report in New York City. “As the report clearly articulates, for those who are already weighed down by unsustainable housing cost burdens -- that is, the lowest income people -- the recession exacerbates the fragility of their housing. As unemployment grows, so does poverty, and we know that one in 10 people in poverty will become homeless,” Ms. Crowley said.
Using HUD estimates, the report notes that the median foreclosure rate from January 2007 through June 2008 was 8.4% in low income minority communities and 6.3% in low income white communities, each significantly higher than the 2.3% rate in high-income white communities. In this case, low income is defined as household income of less than 80% of the area median income.
In addition, nearly 51% of renters and 43% of owners in the bottom quartile of the nation’s income distribution were designated as having severe housing cost burdens, i.e., more than half their incomes went towards housing.
Households in the bottom income quartile were most likely to fall into the severely burdened category. In 2007, nearly three-quarters of severely cost-burdened households had low incomes. In total, 17.9 million households in 2007 faced severe housing cost burdens, with an additional 21.6 million households having moderate burdens (spending 30%-50% of their income on housing).
The report also found that on average, households with the lowest expenditures spent over $200 less each month on food, healthcare, and clothing if they faced severe housing cost burdens compared to those with a lesser housing cost burden. These households are considered the most likely to be low income in the Consumer Expenditure Survey.
The annual report examines national trends related to both homeownership and rental housing and includes chapters on Housing Markets, Demographic Drivers, Homeownership, Rental Housing, and Housing Challenges, as well as an appendix of data tables. The State of the Nation’s Housing: 2009 is available at http://www.jchs.harvard.edu/publications/markets/son2009/index.htm.