Housing Choices in Today’s Market Percentage of Household Income spent on Housing All Income Levels: 2009 to 2014
This is the final factoid in a series of five factoids studying the recovering housing market by delving into the primary factors that determine a consumer’s home choices. Not only faced with the decision to rent or buy, households planning to move are making choices based on age, size and cost of housing structures.
According to the Census Bureau, “The conventional public policy indicator of housing affordability in the United States is the percent of income spent on housing. Housing expenditures that exceed 30 percent of household income have historically been viewed as an indicator of a housing affordability problem.”
In all occupied housing units owned or rented, the percent of residents spending 30 percent or more of household income has fallen from 36.4 percent of all units 2009 to 33.4 percent in 2014, a healthy sign. Homeowners spent a significantly less percentage of household income on housing over the last five years. Since 2009, the percent of owner-occupied units with owner’s spending over 30 percent of their income has fallen significantly from 30.4 percent of houses to 24.8 percent.
Traditionally, renters spend significantly more of their income on housing than owners and the percentages have held steady between 2009 and 2014. In 2014, 47.9 percent of renters spent 30 percent or more of household income on their monthly rental cost, almost double the percent of owners.
Source: U.S. Census Bureau, American Community Survey (ACS)