Renters and Homeowners Experienced Divergent Trends in Housing Expenditures in Recent Decades

The Hamilton Project at the Brookings Institution released “A Comparison of Renters and Homeowners in Recent Decades,” examining trends in the housing market over the last several decades, differences in the share of income dedicated to housing costs by tenure, and the greater housing insecurity faced by renters.

The authors use the 2019 Consumer Expenditure Survey to compare how housing expenditures differ for homeowners and renters, finding that renters tend to spend a greater share of their income on housing. In the lowest-income third of households (those making less than $35,000), renters spend nearly 61% of their income on housing, compared to 54% for low-income homeowners. For middle-income households ($35,000 to $80,000), renters spend nearly 34% of their income on housing, compared to 24% for homeowners.

Looking at trends since 2002, the authors find that rent as a share of total household expenditures has risen across income groups, while mortgage interest costs as a share of expenditures have declined. Among the lowest-income renters, the share of income spent on housing has risen by 3 percentage points since 2002, while the share spent on mortgage interest by the lowest-income homeowners has fallen by 3 percentage points. The share spent on rent for the lowest-income third of renters has steadily increased since the Great Recession.

Finally, examining results from the Census Bureau’s Household Pulse Survey and the Federal Reserve’s 2020 Survey of Household Economics and Decision-making, the authors find that renters across income groups reported greater economic insecurity than homeowners, and the difference for households with children was especially pronounced. In July 2020, while nearly 45% of renters with children reported they were just getting by, roughly 15% of homeowners reported similar difficulties.

The report and a technical appendix can be found at: