How much do Americans spend on housing?

Between 2017 and 2021, 31% of households spent 30% or more of their income on housing, according to the Census Bureau’s American Community Survey. This number is made up of 21% of owned households, and half of rented households.

Both the federal government and many mortgage lenders suggest that most households spend 30% or less of their income on housing. In 1969, an amendment to the Fair Housing Act capped public housing projects rent at 25% of a tenant’s income. This cap was raised to 30% in 1981. Mortgage lenders often require principal, interest, taxes, and insurance payments to be less than 28% of income.

However, these guidelines may not work for everyone. For more affluent Americans, these thresholds might not be helpful, and some housing markets may make it difficult to stay within the limits. Conversely, about a quarter of renters reported spending more than half of their income on housing between 2017 and 2021.

Younger and lower-earning households tend to spend a larger portion of their incomes on housing. For instance, 64% of households that earned less than $50,000 annually spent more than 30% on housing costs. That share rose to 75% for lower-earning households where the householder was younger than 30.

Owners tend to spend less than renters. About 39% of owners owned their homes outright and no longer have mortgage or interest payments. Instead, their costs included real estate taxes, insurance, utilities, or condo fees.

It's worth noting that the costs of owning a home today may be higher than what's reflected in the data here. This data covers the period from 2017 to 2021, when interest rates were lower. In fact, according to Freddie Mac, the average interest rate on 30-year mortgages peaked at 4.94% during this period. However, as of May 11, 2023, that same estimate shows the average interest rate to be at 6.35%.

People living in big cities including New York, Los Angeles, or San Francisco might be concerned about the high housing costs. However, it turns out that housing costs in these areas were actually comparable to the national average. The housing cost burdens for the largest metropolitan areas are comparable to the overall national rate: a median proportion of owner cost was 17.6%, and median proportion of gross rent was 30.6%.

That said, there are some areas where the housing cost burden was higher than average. Out of the 15 most populous metropolitan areas, the Miami-Fort Lauderdale-West Palm Beach area topped the renter housing cost burden rate at 37%. It tied for highest owner cost burden at 22% with New York-Newark-Jersey City, Los Angeles-Long Beach-Anaheim, and California’s Riverside-San Bernardino-Ontario region.

Interestingly, while the San Francisco-Oakland-Hayward area has the nation’s highest housing costs, its residents also have higher incomes, making its housing cost burden lower than in areas such as Miami-Fort Lauderdale-West Palm Beach when you look at the national picture.

In these areas, like the rest of the country, younger households and lower-earning households spend larger shares of their incomes on housing.

Use the dropdown menus on the chart below to see the shares of income spent on housing for households similar to your age or income group.

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