A report by the Brookings Institution, Cost, crowding, commuting? Housing stress on the middle class, finds that middle-income households in the U.S. on average fare well on three measures of housing stress: affordability, crowding (home size), and commute times. The report notes some exceptions, particularly for lower-middle-incomes households and households living in high-cost metro areas. The report recommends state and local governments address the inadequate housing supply that has led to high prices in high-cost metros.
The report defined middle-class households as those in the middle 60% of their metropolitan area’s income distribution. The authors focused on households with at least one adult aged 18 to 65 in the labor force.
Middle-income households spent, on average, less than 30% of their incomes on housing costs. Lower-middle-income households, however, spent nearly 40% on average, making them housing cost-burdened. Poor households in the bottom 20% of the income distribution spent on average more than 60% of their incomes on housing, making them severely housing cost-burdened. Poor and lower-middle income households were cost-burdened regardless of whether they lived in low-cost or high-cost metro areas.
Three percent of middle-income households nationally experience housing crowding, defined as more than two persons per bedroom. The report notes two groups with higher rates of crowding: lower-middle-income households in the highest-priced metros (9%) and families with children in the highest-priced metros (14%).
Average commute times varied little by household income or household type, but they did vary by metropolitan housing prices. The average commute time was 8 minutes longer in the most expensive metros compared to the least expensive metros. Very long-commute times of more than one hour were more common (greater than 10% of commutes) in high-cost metros.
Homeownership rates were lower in high-cost metro areas. The report also highlights the racial disparities in middle-income homeownership, with white households significantly more likely than black and Hispanic households to be homeowners.
The report notes that much of the housing stress among middle-income households is in high-cost markets. Given that federal housing resources are insufficient to serve even the lowest-income households, the report acknowledges that more federal assistance for middle-income households is unlikely. The report calls on local and state governments to implement long-term housing solutions that increase the supply of housing, particularly near jobs and transit infrastructure.
Cost, crowding, or commuting? Housing stress on the middle class is available at: https://brook.gs/2YeFOwM