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The Most Housing Cost-Burdened Cities in America

·5 min read
SmartAsset: Where Residents Are Most and Least Severely Housing Cost-Burdened - 2022 Edition
SmartAsset: Where Residents Are Most and Least Severely Housing Cost-Burdened - 2022 Edition

With higher home prices, rising interest rates and a bear market upon us, Americans are struggling to find affordable housing. According to the Department of Housing and Urban Development (HUD) guidelines, residents in cities across the nation are considered severely cost-burdened when their household spends more than 50% of their combined income on housing costs. Nationally, 13.76% of households exceed this threshold. However, in some parts of the country, a larger proportion of households are severely housing cost-burdened.

To understand where Americans are struggling with housing costs, we compared data for the 150 largest cities. Specifically, we analyzed the total number of homeowner and renter households to the number of these households spending 50% and over on housing. Below we discuss the most severely housing cost-burdened cities for renters and homeowners. For details on our data sources and how we put all the information together to create our final rankings, read the Data and Methodology section below.

This is SmartAsset’s sixth study on the most severely housing cost-burdened cities. Check out the previous version here.

A financial advisor can help you determine if you can afford to rent or buy a home.

Key Findings

  • The top-ranked city is more than three times as severely housing cost-burdened as the bottom-ranked city. In Glendale, California, 31.08% of households are severely housing cost-burdened, compared to Overland Park, Kansas where that same figure is 8.86%.

  • Five out of the 25 cities where fewer residents are severely housing cost-burdened are in Texas. Other highly populated states, such as New York and California primarily comprise the places with more severely housing cost-burdened residents. However, no Texas city is in the top 50 places where residents are most severely housing cost-burdened.

Cities in California, Florida and New York primarily comprise the places with the highest percentage of residents that spend more than 50% of their income on housing costs. However, major cities like Newark, New Jersey and New Orleans, Louisiana also have a presence at the top with 30.05% and 23.62% of households spending more than 50% of income on housing costs, respectively.

At the other end of the list, Overland Park, Kansas has the lowest percentage of severely housing cost-burdened households (8.86%). Gilbert, Arizona has the second-lowest percentage of residents that spend more than 50% of their income on housing (9.89%). Overland Park and Gilbert are the only two cities where this figure falls below 10%.

Cities Where Renters Are Burdened More by Housing Costs

In general, renters tend to be more housing cost-burdened than homeowners. And while some places are more favorable for renting rather than owning, the financial burden of renting tends to be high in large cities.

The percentage of renters that are severely housing cost-burdened across the 150 largest cities ranges from 14.01% (Overland Park, Kansas) to 37.77% (Glendale, California). In fact, nine of the 20 cities where renters are most affected are located in the Golden State.

Across the East Coast, three Florida cities rank high in the top 10 including the second-most populous Florida city, Miami. The Magic City ranks No. 4 with 31.81% of renters that are severely housing cost-burdened. Hialeah and Tallahassee are No. 2 and No. 6 with 36.74% and 31.40% of renters, respectively, spending more than 50% of income on housing costs.

Cities Where Homeowners Are Burdened More by Housing Costs

Nearly two-thirds of Americans are homeowners, and like renters, many homeowners struggle with housing costs.

In Newark, New Jersey more than one in four homeowners is severely housing cost-burdened (26.12%, to be exact). In fact, Newark is the only city of the 150 included in our study where the percentage of severely housing cost-burdened homeowners exceeds 20%.

The two most populous cities in the entire nation - New York, New York and Los Angeles, California - also rank in the top 10 cities where homeowners are most severely housing cost-burdened. In New York, 17.40% of homeowners spend more than 50% on housing costs and in Los Angeles, that figure is 18.76%.

Data and Methodology

To find where homeowners in the U.S. are the most and least severely housing cost-burdened, we examined the 150 largest cities. For each of these cities, we found the total number of homeowner and renter households and the number of homeowner and renter households spending more than 50% of their income on housing.

We took the number of homeowner households in each city paying more than 50% of their income on housing and divided it by the total number of homeowner households in that city in order to calculate the percentage of households that are severely housing cost-burdened. We then ranked each city based on this percentage.

Data comes from the Census Bureau's 2020 5-year American Community Survey.

Tips for Keeping Housing Costs Affordable

  • See how much you can afford to spend in rent. If you’re considering taking on monthly rent or changing apartments, use our budget calculator to help fit in the additional expense into your budget or to help squeeze out a little more for savings so you can still afford your needs and wants.

  • See how much you can afford to spend on buying a home. If you are looking to buy, get a clear sense for what you can afford most comfortably before signing the papers. Use our free calculator to help determine how much house you can afford and how much you can expect to pay in monthly housing costs.

  • Not sure whether you want to rent or buy? Even if you have the savings to buy a first home, be sure the switch makes sense. If you are coming to a city and plan to stay for the long haul, buying may be the better option for you. On the other hand, if your stop in a new city will be a short one, you’ll likely want to rent. SmartAsset’s rent vs. buy calculator can help you see the cost differential between purchasing a home or apartment and renting. 

  • A financial advisor can help you determine if you can afford to rent or buy a home.

Questions about our study? Contact press@smartasset.com.

Photo credit: ©iStock/gopixa

The post Where Residents Are Most Severely Housing Cost-Burdened – 2022 Edition appeared first on SmartAsset Blog.