Report: Housing Affordability for U.S. Working Households Declines

A study released in December reports that housing cost burdens for households have increased, despite declines in housing prices across the nation. The report, produced by the Center for Housing Policy (CHP), shows that the proportion of working households spending more than 50% of their monthly income on housing costs (including utilities) increased significantly to 21% in 2008, from 20% in 2005. The report finds that one reason for this increase is a dramatic 23% rise in utility costs between 2005 and 2008. The study also cites increases in monthly payments for homeowners with adjustable-rate mortgages as a factor .

The study uses the American Community Survey (ACS) to focus on the 47.3 million working households in the United States in 2008, defined in the report as households with members working 20 or more hours per week, but with incomes less than or equal to 120% of the area median income (AMI). These households make up about 40% of the overall population. 

Among the 10 million working households spending more than 50% of their monthly income on housing costs, the burden was split almost evenly between renters (22% of whom were severely cost burdened) and homeowners (20% of whom were severely cost burdened). These levels increased for homeowners (18% in 2005) but stayed the same for renters. Income profiles showed that renters generally had lower incomes than owners, a finding that remained unchanged between 2005 and 2008.

The study, Housing Affordability Trends for Working Households, also provides analysis by census region and state-by-state and can be found at: http://www.nhc.org/pdf/Housing%20Affordability%20Trends.pdf