Fewer Americans are feeling the pinch of mortgage costs, but there is a catch, according to the latest U.S. Census Bureau data.
Only 20.9% of homeowners with a mortgage were cost-burdened in 2018, the bureau reports. That is down about 8 percentage points from a decade ago, when 28.8% of homeowners were considered cost-burdened by their mortgage. “Cost-burdened” is defined by the bureau as spending at least 35% of monthly household income on housing costs, which includes utility bills, real estate taxes, property insurance, and other common ownership fees.
However, researchers note the reason homeowners are less burdened by housing costs is that fewer people own homes now. The homeownership rate was 67.9% 10 years ago. Today, it is 64.8%.
Meanwhile, the nation’s rental population has grown to its largest size on record—43.8 million, the bureau reports. Rising home prices and student loan debt may be prompting more adults to delay homeownership.
Housing costs for renters have remained stagnant, but are still large burdens for the increased population. About 40.6% of renters spent 35% or more of their monthly household income on rent and utility bills in 2018, census data shows. That is about the same as in 2008, but it represents a higher renter population. The greater burden may be making it more difficult for renters to save enough to transition into homeownership.