WASHINGTON (Center for Housing Policy) – Most working Americans probably expect housing costs to take a substantial chunk out of their paychecks. But that chunk seems to be getting bigger.
According to a new report from the Center for Housing Policy, nearly one in four working U.S. households spends more than half of their total income on housing. One reason for this is that incomes are shrinking.
Between 2008 and 2010, incomes for working homeowners slid more than twice as much as housing costs. In fact, incomes for working homeowners fell even more sharply than they did for working renters.
“The data show that homeowners have been hit hard by the housing crisis in more ways than just lost equity,” said Jeffrey Lubell, executive director of the Washington-based center. “Many working homeowners have been laid off or had their hours cut.”
Lubell also said most homeowners bought their homes at a time when housing prices were much higher than they are today.
“As a result, their housing costs have not declined nearly as much as you would expect from looking at the broader market declines in home sale prices,” he said.
Meanwhile, renters have seen rents go up thanks to increased demand for apartment living.
“More and more people are interested in renting,” said Laura Williams, who authored the report. “Some prefer it because it allows them to be more mobile in a tough job market. Others are postponing purchasing a home or facing difficulties obtaining a mortgage. Given the long lead times involved in responding to increased demand with increased supply, the rental market has tightened somewhat and rents increased.”