The government, as well as lenders, generally advise that Americans spend no more than 30% of their monthly income on housing. Households spending more than that on rent or mortgage payments are considered cost burdened and often do not have enough money left over for other necessities. Still, 32% of American households are cost burdened, and in some of the country’s more expensive cities, the share is far higher.
Housing is a basic need that is becoming increasingly difficult to meet in the United States. According to “The State of the Nation’s Housing 2018,” a report compiled by the Joint Center for Housing Studies of Harvard University, there is a serious shortage of affordable housing in the United States. Nationwide, the median rent climbed 20% faster than inflation from 1990 to 2016. The median home price climbed 41% faster over the same period.
Rising housing costs are attributable to a number of factors, including better housing quality, rising materials and labor costs, and growing scarcity of developed land. Because of these factors, coupled with weak income growth over the last three decades, housing has become unaffordable for millions of Americans, particularly those in lower- and middle-income brackets.
24/7 Wall St. reviewed “The State of the Nation’s Housing 2018” to identify the 21 metro areas where the largest share of households are struggling to afford their homes. In each metro area on this list, at least 35% of all households spend at least 30% of their income on housing. In all but two metro area on this list, over half of all households earning between $30,000 and $44,999 a year are burdened by housing costs.
Sponsored: Find a Qualified Financial Advisor
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.