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Friday, July 19, 2024

More than a Quarter of Homeowners in U.S. Are ‘House Poor’

'These cost-burdened homeowners have found themselves facing budget-busting housing expenses... '

(By Brett Rowland, The Center Square) Nationwide 27.4% of homeowners are considered “house poor,” meaning they spend more than 30% of their income on housing costs.

However, in some U.S. cities, far more Americans are living beyond their means, according to research from the U.S. Chamber of Commerce. In Hialeah, Florida, 59.3% of homeowners are spending more than 30% of their income on housing costs. While Hialeah has the highest percentage of homeowners spending more than 30% of their income on housing costs, it was not alone.

Among the top five highest are Los Angeles (48.7%), New York City (45.3%), Miami (44.6%) and Hollywood, Florida (44.3%). Of the top 10 cities, four are in California and four are in Florida. The other two were New York City and Honolulu, according to the report from the U.S. Chamber of Commerce.

Nearly 3 in 10, or 27.4% of U.S. homeowners with a mortgage are considered to be cost-burdened with housing expenses, according to the U.S. Census Bureau. Overall, 21% of cost-burdened homeowners have a household income of less than $75,000, according to the report.

In Los Angeles, where 48.7% of homeowner are considered “house poor,” that’s about 179,821 households in a city where the median household income was $122,032 and the median yearly household costs totaled $35,664.

The “30% rule” is a common standard for budgeting, which advises homeowners to avoid paying more than 30% of their income on housing expenses. However, the U.S. Chamber of Commerce notes that for many homeowners, it’s not an easy rule to follow.

“These cost-burdened homeowners have found themselves facing budget-busting housing expenses such as monthly mortgage payments, property taxes, homeowners insurance and utilities,” according to the report.

At the other end of the spectrum are homeowners who pay less than 20% of their income toward housing. Huntsville, Alabama, tops of the list of cities with the most “budget-minded” homeowners, according to the report. In Huntsville, 65.1% of homeowners spend less than 20% of their income on housing. Other budget-minded cities include Cary, North Carolina (59.8%); Pittsburgh, Pennsylvania (59.3%); Raleigh, North Carolina (58%); and Fort Wayne, Indiana (57.5%).

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