According to the common measure of housing affordability, a household is considered "cost-burdened" when housing expenses consume over 30% of occupant's total gross income. Those that spend more than 50% of their income on monthly housing costs are classified as "severely" cost-burdened.
The most recent data derived from the 2022 Census American Community Survey reveals that the proportion of American renters facing housing cost burdens has reached its highest point since 2012, undoing the progress made in the ten years leading up to the pandemic. The majority of this increase can be attributed to a surge in severely burdened households—those expending more than half of their earnings on rent.
The latest report by Apartment List explores the cost burden rate and what it says about the state of housing affordability in the U.S. Here are some of their takeaways:
1. The pandemic burdened nearly 2 million renters in the last three years
The number of cost-burdened renter households have been decreasing steadily since 2011. In a five-year span alone, the number of homes fell by 826,000 between 2014 and 2019. By 2019, just under 20 million renter households were considered cost-burdened.
In 2022, however, the number of cost-burdened renter households has increased by 1.9 million—making the total 21.8 million—and the number of non-burdened households fell by 957,000.
![2019 versus 2022 chart of renters who spend more than 30 percent of income on housing](/sites/default/files/inline-images/headline.jpg)
2. Severely-burdened households make up 27% of those affected
Renter households that spend more that 50% of their income on housing costs are considered severely-burdened. In the past three years, the share of these households among the total of those burdened increased by 3% to 26.7 percent.
Though the cost burden rate is much lower for those who own homes, it has also been rising in recent years. In 2022, the percentage of homeowners that are cost-burdened jumped to 27.9 percent, up from 26.6% in 2019.
![House cost burden chart comparing moderately to severely burdened renters since 2005](/sites/default/files/inline-images/cost-burden-graph.jpg)
3. The cost burden is driven by rent prices rising faster than household incomes
After the Great Recession, renter cost burden improved gradually for several years. While the median rent rose 26 percent, the median renter household income increased 37 percent in the same eight years.
Since 2019, renter cost burden has increased 4% and median rent jumped up 19 percent, while renter income rose only 16 percent. According to the Apartment List analysis, 74 of the 100 largest U.S. metros have experienced rent prices growing faster than renter income. Since 2019, the cost burden has worsened in nearly all (94%) of the top metros.
![Chart of renter cost burden since 2011](/sites/default/files/inline-images/rents_v_incomes.jpg)
Future outlook from Apartment List
"Preliminary data from the Bureau of Labor Statistics shows that incomes in the second quarter of 2023 are up 5.7% year-over-year (1.7% after adjusting for inflation). And while these statistics are not available for renters specifically, other breakdowns show that recent wage growth is higher for lower-earners and non-white workers, who are both more likely to rent.
However, rent growth may also continue on an upward trajectory. For more than half of all renter households, monthly rent payments are eating up a large enough share of their income to put financial stability at risk. And more than one-in-four renter households spend more than half of their income on rent—a level which can often necessitate extreme measures such as overcrowding and cutting back on spending on other basic needs. Thankfully, policymakers have demonstrated an increased focus on this issue in recent years, but solutions are still urgently needed."
To read the full report, visit Apartment List
Related Stories
Market Data | Nov 30, 2021
Two-thirds of metro areas add construction jobs from October 2020 to October 2021
The pandemic and supply chain woes may limit gains.
Market Data | Nov 22, 2021
Only 16 states and D.C. added construction jobs since the pandemic began
Texas, Wyoming have worst job losses since February 2020, while Utah, South Dakota add the most.
Market Data | Nov 10, 2021
Construction input prices see largest monthly increase since June
Construction input prices are 21.1% higher than in October 2020.
Market Data | Nov 9, 2021
Continued increases in construction materials prices starting to drive up price of construction projects
Supply chain and labor woes continue.
Market Data | Nov 5, 2021
Construction firms add 44,000 jobs in October
Gain occurs even as firms struggle with supply chain challenges.
Market Data | Nov 3, 2021
One-fifth of metro areas lost construction jobs between September 2020 and 2021
Beaumont-Port Arthur, Texas and Sacramento--Roseville--Arden-Arcade Calif. top lists of gainers.
Market Data | Nov 2, 2021
Construction spending slumps in September
A drop in residential work projects adds to ongoing downturn in private and public nonresidential.
Hotel Facilities | Oct 28, 2021
Marriott leads with the largest U.S. hotel construction pipeline at Q3 2021 close
In the third quarter alone, Marriott opened 60 new hotels/7,882 rooms accounting for 30% of all new hotel rooms that opened in the U.S.
Hotel Facilities | Oct 28, 2021
At the end of Q3 2021, Dallas tops the U.S. hotel construction pipeline
The top 25 U.S. markets account for 33% of all pipeline projects and 37% of all rooms in the U.S. hotel construction pipeline.
Market Data | Oct 27, 2021
Only 14 states and D.C. added construction jobs since the pandemic began
Supply problems, lack of infrastructure bill undermine recovery.