While homeownership is known to be costly, 21.48% of owner-occupied households in the U.S. are housing cost-burdened, according to a new report from LendingTree.
LendingTree’s latest report analyzed U.S. Census Bureau American Community Survey data to determine the share of owner-occupied households in each state spending at least 31% of their income on monthly housing costs. The report found that married couple households are least likely to be housing cost-burdened at 14.47%. The share is slightly higher for couples with kids at home at 15.8%.
In addition, single women homeowners are most likely to be housing cost-burdened at 39.62%. For single mothers, 43.31% are cost-burdened. Meanwhile, 32.59% single men are cost burdened, along with 30.36% of single fathers.
States with the highest shares of cost-burdened households:
- Hawaii has the highest overall share of cost-burdened households at 31.81%. Other shares include: married couples at 29.75%, married couples with young children at 22.52%, single women at 57.1%, single mothers with young children at 59.37%, single men at 46.83%, and single fathers with young children at 48.19%.
- California’s overall share falls in second at 29.65%. Other shares include: married couples at 22.91%, married couples with young children at 24.83%, single women at 49.66%, single mothers with young children at 50.51%, single men at 42.92%, and single fathers with young children at 39.05%.
- New Jersey comes in third with an overall share of 28.47%. Other shares include: married couples at 20.24%, married couples with young children at 20.54%, single women at 52.17%, single mothers with young children at 56.51%, single men at 43.83%, and single fathers with young children at 39.10%.
States with the lowest shares:
- West Virginia has the lowest overall share of cost-burdened households at 14.28%. Other shares include: married couples at 7.7%, married couples with young children at 10%, single women at 27.13%, single mothers with young children at 27.69%, single men at 23.11%, and single fathers with young children at 32.73%.
- Indiana comes in second at an overall share of 15.05%. Other shares include: married couples at 8.19%, married couples with young children at 9.78%, single women at 32.81%, single mothers with young children at 35.28%, single men at 24.19%, and single fathers with young children at 23.71%.
- Falling in third is North Dakota with an overall share of 15.57%. Other shares include: married couples at 10.19%, married couples with young children at 10.16%, single women at 29.31%, single mothers with young children at 58.85%, single men at 26.4%, and single fathers with young children at 16.4%.
Major takeaway:
“As this study shows, those who spend at least 31% of their monthly income on monthly housing costs are considered housing-cost burdened. The reason is because households that spend more than this can end up with less money than needed for their savings or to keep up with important bills, like food and car or credit card payments,” said Jacob Channel, LendingTree’s Senior Economist and report author. “That said, spending 31% or more of your income on housing costs isn’t necessarily the end of the world. Some people can be financially secure while spending more money on housing than what is generally recommended.”
Channel concluded, “At the end of the day, you should do your best to keep the amount you spend on your home manageable. However, what “manageable” will look like will vary by person and household. Owing to this, though the recommendation that people spend less than 31% of their monthly income on housing costs is often good to follow, it’s far from an absolute rule.
For the full report, click here.
