About 40.6 million U.S. households spent more than 30% of their incomes on housing in 2021, an increase of 3.4 million from 2019, according to a new analysis from the Joint Center for Housing Studies (JCHS) of Harvard University.
That means nearly one-third of all households in the country were cost burdened, including a record number of renters, 21.6 million, during the first full year of the COVID-19 pandemic.
“That’s about half of all renters across the country,” says research associate Alexander Hermann.
Much of the latest increase came from households that were severely burdened, those paying more than half of their incomes on housing. Fully, 20.3 million households were severely burdened in 2021, up 2.7 million from 2019, according to JCHS officials who dug into the most recent data from the American Community Survey.
The increase in cost-burdened renter households is attributed in large part to changes in the distribution of renter incomes since the start of the pandemic. The median income for renter households fell from $44,500 in 2019 to $43,500 in 2021, a 2.3% decline, reports JCHS.
The number of lower-income renters making less than $30,000 annually increased by 223,000 households, while the number of renters with incomes over $75,000 fell by 280,000 households.
The pressure wasn’t just on renters as 22.8% of homeowners, roughly 19 million households, spent more than 30% of their incomes on housing in 2021. That’s an increase of about 2.5 million households since 2019.
This leads to a big question: Are these recent increases a blip during the height of the pandemic or part of a bigger and continuing pattern?
Some of the contributing factors seen on the supply side have persisted and will continue to persist, says Hermann. However, on the rental side, there is a large number of units under construction, he adds, which could help ease a little of the pressure and open up the market for more renters.
Another important concern is the enormous stress being felt by lower-income households.
Hermann notes that these renters face the greatest affordability challenges across the country. “That’s an issue that has persisted,” he says. “It speaks to the need for rent subsidies and other kinds of supports for those households that are harder to serve by the private market in particular.”
To learn more, read JCHS research assistant Peyton Whitney’s blog post about the growing number of cost-burdened households.
