Working families spending more for housing

With the incredible decline in home prices in some areas, you'd expect that housing would be consuming a smaller chunk of family incomes.

You'd be wrong.

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From 2008 to 2009, the number of working families paying more than 50% of their total income for housing grew by more than 600,000, according to a new report by the Center for Housing Policy.

“These findings will be surprising to many who have followed the nationwide decline in home prices,” Jeffrey Lubell, the center's executive director, said in a news release. “Housing costs for existing homeowners have declined only slightly, while housing costs for working renters have actually gone up."

From 2008 to 2009, the number of working households spending more than 50% of their income on housing grew from just under 10 million to more than 10.5 million, even though the total number of working households fell by 1.1 million. The percentage of working households with an extreme housing burden rose from 21.1% to 22.8%.

Renters fared worse than owners, with 24.5% of renters paying more than 50% of their income for housing in 2009, up from 22.1% in 2008. In addition to facing declining incomes, they also faced rising rents.

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Among homeowners, the percentage paying more than 50% of their income for housing rose from 20.1% to 21.2%.

As the National Housing Conference -- the Center for Housing Policy is its research affiliate -- pointed out in its "Open House" blog:

When you think about it, these findings make sense, right? Falling home prices only benefited those who bought a home in 2009. The mortgage payment didn’t go down for most homeowners, even though the value of their home – and their equity – fell, sometimes dramatically. With more people looking for an affordable place to rent, it follows that vacancy rates tightened and rents rose at the bottom end of the market, as HUD’s recent report suggests. And these trends occurred in the context of rising unemployment and increasing financial hardship.

The study measured households in which members work at least 20 hours a week and the family earns no more than 120% of the median income. About one-third of owner-occupied households in the United States fit into that category, as do about 60% of households that rent.

The housing burden varies throughout the country. The percentage of working households with a severe housing burden rose significantly in 25 states. Those included states hard-hit by the housing crisis, such as Florida and California, which reported the highest rate of burdened households, at 33%. States that were not hit as hard by the real-estate crisis, such as Texas, also saw an increase in the percentage of households spending more than 50% of their income on housing. No state saw a significant decline.

Among the 50 major metropolitan areas, the housing burden increased significantly in 16 and stayed about the same in the others.

These are the metropolitan areas with the largest percentage of residents paying more than 50% of their income for housing:

• Miami-Fort Lauderdale, Fla., 42%
• Los Angeles-Long Beach, Calif., 37%
• Orlando, Fla., 35%
• Riverside-San Bernardino-Ontario, Calif., 35%
• San Diego, 34%
• New York-Northern New Jersey, 32%
• San Francisco, 29%
• Las Vegas, 29%
• Tampa, Fla., 29%
• San Jose, Calif., 28%
• Sacramento, Calif., 28%

These are the metropolitan areas where the smallest percentage of households carried a severe housing burden:

• Pittsburgh, 15%
• Louisville, Ky., and its Indiana suburbs, 15%
• Kansas City, 6%
• Cincinnati, 16%
• Raleigh, N.C. 17%