According to the most recent data from the U.S. Census Bureau, almost one-third of American households are considered cost-burdened, meaning they spend 30 percent or more of their income on housing costs. While this figure has declined by almost 6 percentage points following the Great Recession, it is likely to increase again as the U.S. faces an unprecedented economic downturn due to the Coronavirus pandemic. Millions of Americans have experienced loss of work or other financial hardships due to the ongoing economic shutdown. Those households who already spend more than 30 percent of their income on housing are especially vulnerable.
Fortunately, many mortgage lenders are offering options to defer mortgage payments, and the federal government is pausing foreclosures and evictions on mortgages backed by Fannie Mae and Freddie Mac or the Federal Housing Administration. Renters face a more uncertain situation—in most cities it will be up to individual landlords to work out payment options for renters unable to pay rent.
While nearly one-third of all households are cost-burdened, renters are more likely to be than homeowners. Nationally, over 46 percent of renter households are cost-burdened compared to just 22.3 percent of owner households. This holds true across all income groups with the exception of those households making $75,000 or more. Renters may be doubly hurt in the current economic crisis due to their increased likelihood of being cost-burdened and not having the same financial protections as homeowners.
Due to differences in housing costs and job markets across the country, the numbers of cost-burdened households vary significantly across cities and states. At the state level, California and New York have the largest shares of cost-burdened households in the country, at 40.5 and 37.5 percent, respectively. North Dakota claims the lowest share of households that are cost-burdened, at 22 percent.
To determine the states with the most cost-burdened households, researchers at Construction Coverage, a review site for construction software and insurance, analyzed the latest data from the U.S. Census Bureau. The researchers ranked states according to the share of all households that are cost-burdened. Researchers also calculated the share of owner households that are cost-burdened, the share of renter households that are cost-burdened, median monthly housing costs, and median household income.
The analysis found that 24.7% of Indiana households are cost-burdened, compared to the national rate of 31%. Out of all U.S. states, Indiana has the 8th lowest percentage of cost-burdened households. Here is a summary of the data for Indiana:
- Share of all households that are cost-burdened: 24.7%
- Share of owner households that are cost-burdened: 16.5%
- Share of renter households that are cost-burdened: 43.0%
- Median monthly housing costs: $838
- Median household income: $55,746
For reference, here are the statistics for the entire United States:
- Share of all households that are cost-burdened: 31.0%
- Share of owner households that are cost-burdened: 22.3%
- Share of renter households that are cost-burdened: 46.1%
- Median monthly housing costs: $1,082
- Median household income: $61,937
For more information, a detailed methodology, and complete results for all states, you can find the original report on Construction Coverage’s website: https://constructioncoverage.com/research/cities-with-the-most-cost-burdened-households