Renters have a much tougher time than homeowners when it comes to maintaining what’s considered affordable housing costs, according to December data from sources including the U.S. Census Bureau.
Under federal guidelines, housing is considered affordable if rent or mortgage payments, plus utilities, do not exceed 30% of total household income.
But U.S. renters’ housing costs amounted to an average of 33% of household income, according to a Census Bureau survey report that tracked housing costs from 2017 to 2021. In contrast, homeowners’ housing costs accounted for 22% of total income.
There are several factors at play, including the age and income of renters. A report from Pew Research Center, citing 2021 census data, noted the majority of U.S. renter households — 53% — are headed by people under 45, about a third of whom are under 35.
The median age for U.S. renters was 43 in 2021, compared with 57 for homeowners. Younger renters generally are early in their careers and haven’t reached peak incomes. The median annual household income of U.S. renters was $41,000 in 2021, compared with $78,000 for homeowners, census numbers show.
The Pew report showed rent costs nationwide increased by a median of 12% between 2019 and 2021, with higher spikes in cities including Boston, Phoenix, Atlanta, Chicago and Dallas. U.S. median household income declined 2.9% from 2019 to 2020, with no significant change from 2020 to 2021, census data shows.
The nation’s nearly 46 million renting households accounted for about one-third of all households at the end of 2021. More than 19 million, or 40%, of all U.S. renter households spent more than 30% of income on housing costs during the past five years.
“We’ve heard for a while now that incomes were not keeping up with the increased cost of housing,” Census Bureau demographer Molly Cromwell said in a statement from the agency. “With the most recent data, we can see just how many households were burdened by the cost of their housing.”