Housing affordability may finally be showing signs of improvement, according to a new analysis of American Community Survey data.
About 33.6 percent of households were cost-burdened in 2015, which means they spent more than 30 percent of their incomes on housing costs. That’s down from 34.6 percent a year earlier, according to Jed Kolko, chief economist at job site Indeed, and senior fellow at the Terner Center for Housing Innovation at the University of California, Berkeley.
Low mortgage rates are one factor helping to improve affordability. Renters are also seeing improvement, which may be aided by recent income gains that are outpacing rent growth, Kolko notes.
About 49 percent of renters were cost-burdened in 2015, which means they spent more than 30 percent of their incomes in rent, compared to about 50 percent a year earlier. That is the lowest percentage since 2008, according to Kolko’s analysis.
Also notable, single-family home ownership has seen its biggest rise since 2007. Single-family ownership rose to 65.7 million owner-occupied single-family homes in 2015 compared to 65.2 million a year earlier.
Source: “U.S. Households Make Long-Awaited Gains in Housing Recovery,” The Wall Street Journal (Sept. 15, 2016)