The US Census Bureau’s 2023 American Community Survey reveals that nearly half of all renter households in the US are cost-burdened, paying more than 30% of their income towards housing costs. This underscores America’s home-affordability crisis, with both buying and renting becoming increasingly prohibitively expensive for many Americans.
The median cost of housing for renters rose from $1,354 to $1,406 (after adjusting for inflation) between 2022 and 2023, representing a 3.8% increase. This outstrips the 1.8% increase in home values. The survey indicates that more than 21 million households are considered cost-burdened.
The share of Americans’ income paid towards rent differs by race. In 2023, 56.2% of Black or African American households spent more than 30% of their income on housing costs, compared to 49.7% of the total population. Among Hispanic households, 53.2% were cost burdened.
The survey also found that about 2.5 million, or 30.6%, of Black households were considered “severely cost-burdened,” meaning they spent more than 50% of their income on housing costs in 2023.
Housing costs have spiked since the pandemic, driven by significant demand for housing and high interest rates. While mortgage rates are still elevated, they have been falling recently in anticipation of a Fed interest rate cut this month. Insurance premiums have also grown unaffordable in areas prone to natural disasters.
The survey highlights that renters shouldered a higher cost burden as a percentage of their income compared to homeowners in 2023. However, some cities saw buying a starter home being more expensive than renting one, according to Realtor.com’s analysis.
Source: https://edition.cnn.com/2024/09/12/economy/us-housing-costs-survey/index.html