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Young Renters Facing Highest Housing Costs Burdens

Proportion of All Renters Facing a Cost Burden Up 3.3% Since Start of Recession

A new research brief from the Carsey Institute at the University of New Hampshire compares data from the 2007 and 2010 American Community Survey (ACS) to capture the effect of the recession on renter households. The brief describes a tightening rental market during the recession, with severe consequences that disproportionately affected renter households. By 2010, 38% of homeowners with a mortgage and 15% of homeowners with no mortgage faced a housing cost burden, rates comparable to 2007. However, the incidence of housing cost burdens rose more sharply among renter households, from 46% to 49% in 2010. Renters are considered cost burdened when spending more than 30% of their income on rent and utilities.

By 2010, more renters were experiencing a housing cost burden across the entirety of the United States, across all regions and in both urban and rural communities. While renters in the West were most likely to face a cost burden by 2010 (52%), the incidence of housing cost burden rose most rapidly in the South during the recession years. Across the South, 44% of renters faced a housing cost burden in 2007, and this rose to nearly 48% by 2010, a 3.8 percentage point change.

While renters in rural areas were the least likely to face a housing cost burden in both 2007 and 2010, the number of cost burdened renters rose steeply in rural communities during the recession, by 4.3 percentage points. In suburban areas and central cities, the incidence of cost burden among renters rose more modestly, by 3.4 and 2.9 percentage points, respectively. Despite the rapid rise of cost burdened renters in rural communities, renters in central cities remain the most likely to face a housing cost burden. By 2010, over half (51.5%) of all renters were cost burdened in central cities.

The research brief also explores housing cost burdens across age groups and income groups. Renters under age 25 were most often cost burdened (60%) in 2010. Renter households earning less than $20,000 were most likely to face a cost burden in both 2007 and 2010. However, sharp increases in the number of cost burdened renters occurred among renter households earning between $20,000 and $50,000, with the proportion of cost burdened renters in this income category rising more than 6 percentage points. According to the study’s author, the modest increase in cost burdens among renter households earning below $20,000 (0.9 percentage point) indicates the effectiveness and importance of housing programs. Without the existence of such programs, low income households would have fared much worse during the recession.

The research brief, Renters More Often Burdened by Housing Costs After Recession, is available here.