Nearly one-third of all U.S. households pay more than 30% of their incomes for housing, according to a 2018 study from Harvard’s Joint Center for Housing Studies. And approximately half of renter households – about 11 million – bear a severe burden from housing costs, which means they’re paying 50% or more of their income on housing. About 7.5 million American homeowners experience similar difficulties that can stifle their ability to build up their savings accounts. Furthermore, low-income and minority households are more likely to be cost-burdened by housing. And while housing takes up a major chunk of most people’s budgets, there are some cities where the amount is more disproportionate than others. With this in mind, SmartAsset took a look at the most and least severely housing cost-burdened cities in the U.S.
To find these cities, we compared the number of households spending more than 50% of their household income on housing costs to the total number of households. According to the Department of Housing and Urban Development (HUD), “housing cost-burdened” means paying more than 30% of household income on housing costs. “Severely housing cost-burdened” means paying more than 50% of household income on housing costs.
This is SmartAsset’s third study on the most and least severely housing cost-burdened cities. Check out our 2018 version here.
Coastal troubles. The two coasts are the most severely cost-burdened areas of the country. Of the top 10 cities in this study, six are on the East Coast and three are in California.Merrier in the middle. On the flipside, the cities with the lowest percentages of households that are severely housing cost-burdened tend to be in the middle of the country. States like Texas, Nebraska and Idaho are all represented on the lower end of our list.
The 10 Most Severely Housing Cost-Burdened Cities
1. Miami, FL
Miami, Florida may have warm weather and access to the beach, but it costs a lot to live there. This leaves 19.49% of its residents severely housing cost-burdened. Miami also ranked in the top 10 of SmartAsset’s study of how much income one would need in order to afford to pay rent comfortably, bringing the high cost of living there into sharper focus.
2. Jersey City, NJ
Jersey City, New Jersey, located right across the Hudson River from New York City, is home to both a healthy population of commuters and people who live and work in the Garden State. But almost one-fifth of those residents, 19.39%, are severely cost-burdened for housing.
3. Los Angeles, CA
Los Angeles, California comes in third on this list, with 18.50% of its residents severely housing cost-burdened. It also came in third on SmartAsset’s list of cities with the highest income needed to pay rent comfortably. The same study also found that LA had the fastest rising rent prices.
4. Hialeah, FL
In Hialeah, Florida, located near Miami, 18.06% of residents are severely housing cost-burden. Census Bureau data places 2017 median household income for this town at $31,012, which is significantly lower than the national median income of approximately $61,000.
5. New York, NY
Anyone who lives in New York City won’t be surprised to know that 17.64% of residents are severely housing cost-burdened. The five boroughs do have a high cost of living, including high home values, which likely contributes to their housing-cost burden.
6. Yonkers, NY
Just north of the Bronx is Yonkers, New York, where 17.52% of residents are severely burdened by housing costs. Yonkers is a desirable suburb about 15 miles away from Manhattan, so it’s likely that many may end up spending a large percentage of their salary to live there.
7. Long Beach, CA
A significant 16.10% of the residents in Long Beach, California are severely housing cost-burdened. Located near Los Angeles, the city is right on the beach, a benefit that may make the pain of higher expenses a little more tolerable.
8. New Orleans, LA
New Orleans, Louisiana is the only city on this list not located on the East Coast or in California. The Big Easy has 15.67% of its residents in severely housing cost-burdened situations. The city has a 26.2% poverty rate, according to Census Data. That places it atop the 50 biggest metro areas in the country for that metric.
9. Pasadena, CA
Pasadena, California is yet another representative from Southern California on this list. There, 15.44% of residents are severely housing cost-burdened.
10. Boston, MA
Boston, Massachusetts wraps up the top 10 with a rate of 15.41% of residents living with severe housing-cost burden. What’s more, Boston has 18.70% of residents living below the poverty rate. This, combined with the high housing costs of living in a major city like, leads to a high rate of housing-cost burden.
1. Lexington, KY
Lexington, Kentucky has the fewest residents with severe housing-cost burdens – just 5.76% of residents fall into this category. The town has relatively low home values, with a median value of $193,100 for owner-occupied units, according to Census data.
2. Buffalo, NY
Only 5.82% of Buffalo, New York residents are severely housing cost-burdened. A much higher percentage of Buffalonians, though, spend between 30% and 50% on housing – nearly 15%. Still, a relatively low median property value of $92,700 makes for more favorable housing conditions.
3. Salt Lake City, UT
Salt Lake City, Utah is next on this list, with a population that is 5.98% severely housing cost-burdened. But this is another city with a much higher percentage of residents who are still regularly housing-cost burdened – 14.49% of people spend between 30% and 50% of income on housing.
4. Boise, ID
In Boise, Idaho, 6.18% of residents are severely housing cost-burdened. The median household income in the city is $55,943, and 13.50% of people live in poverty.
5. Raleigh, NC
Raleigh, North Carolina, found right in the heart of the Research Triangle and with access to three universities, has a population where just 6.34% of people are severely housing cost-burdened. The town has a relatively high median income of $64,660, and 12.60% of the population lives below the poverty line.
6. Lincoln, NE (tie)
In Lincoln, Nebraska, 6.37% of the population is severely housing cost-burdened. Relatively low housing costs contribute to this – the median property value is $171,300.
6. Plano, TX (tie)
Plano, Texas, a Dallas suburb, ties with Lincoln and also has only 6.37% of its population that is severely housing cost-burdened. Another 12.51% of the population, though, is spending between 30% and 50% of total income on housing costs. Still, a high median income of $94,306 helps this city get its place on this list.
8. Garland, TX
Garland, Texas is yet another representative from the Lone Star State. Another suburb of Dallas, it has 6.43% of its population living with severe housing-cost burdens.
9. Chandler, AZ
Chandler, Arizona is a city with 6.48% of its residents in a situation of severe housing-cost burden. An additional 12.29% have housing costs between 30% and 50%. The median household income is $76,860, which likely contributes to this relatively low percentage of residents who are housing cost-burdened.
10. Peoria, AZ
Peoria, Arizona, another representative from the Grand Canyon State, closes this list. There, just 6.62% of the population is severely housing cost-burdened. A relatively high median household income of $72,142 helps make for a fairly low cost-burdened housing situation. Approximately 6.60% of people in Peoria live below the poverty line.
Data and Methodology
SmartAsset used Census Bureau data to determine the most and least severely housing cost-burdened cities. This data, which we found for 126 cities, breaks down residents into the following brackets based on the percentage of the total household income they are spending on housing: less than 20%, 20% to 24.9%, 25% to 29.9%, 30% to 34.9%, 35% to 39.9%, 40% to 49.9% and 50%. The data also lists the total number of households.
We took the number of households in each city paying more than 50% of their income on housing and divided it by the total number of households in that city in order to come up with the percentage of households that are severely housing cost-burdened. We then ranked each city based on this percentage. We also calculated the percentage of households in each city paying between 30% and 50% of their income on housing, but this did not impact the ranking.
Data comes from the U.S. Census Bureau 2017 1-year American Community Survey
Tips on Homeownership
Budget forecast. Knowing what your mortgage payment will look like before you move forward with buying a home is key. Use SmartAsset’s mortgage calculator to get an idea of what your payments could look like.Get expert help. To find the best home that fits your budget, consider speaking to a financial advisor using SmartAsset’s free financial advisor matching service. You answer a few questions and we match you with up to three advisors in your area, all fully vetted and free of disclosures.
The post Most and Least Severely Housing Cost-Burdened Cities appeared first on SmartAsset Blog.