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LendingTree Ranks the Nation’s Largest Metros by Share of Housing-Cost-Burdened Households

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What does it mean to be burdened by housing costs? That varies from household to household, depending on its unique needs and financial considerations. In general, though, households that are spending 30% or more of their monthly income on housing costs can be classified as cost-burdened.

With that in mind, LendingTree used data from the U.S. Census Bureau’s American Community Survey to determine which of the nation’s 50 largest metropolitan areas had the largest share of homeowners spending at least 30% of their monthly income on housing costs.

LendingTree found that while a majority of homeowners in the nation’s largest metros aren’t cost-burdened by housing expenses, a significant portion of them still are.

Key findings

  • Across all 50 of the nation’s largest metros, an average of 27.4% of households are spending 30% or more of their monthly income on housing costs. This number can vary significantly across different metros, and unsurprisingly tends to be considerably higher in more expensive areas with prevalent income inequality, like Los Angeles and Miami.
  • Los Angeles, Miami and San Diego are the metros where the largest share of homeowners are excessively burdened by housing costs. An average of 40.7% of households in these three areas are spending at least 30% of their income on housing costs.
  • Indianapolis, Raleigh, N.C., and Buffalo, N.Y., are the metros where the smallest share of homeowners are spending 30% or more of their monthly income on housing costs. On average, 20% of households with a mortgage qualify as cost-burdened in these three metros.
  • While many homeowners are cost-burdened by monthly housing expenses, a majority of homeowners in each of the nation’s largest metros aren’t. Across the nation’s 50 largest metros, an average of 72.6% of households are spending under 30% of their income on housing costs each month.

Metros where the highest share of owner-occupied households spend at least 30% of their income on housing costs

1. Los Angeles

  • Number of housing units with a mortgage: 1,498,622 
  • Share of households spending 30% or more of their monthly income on housing costs: 42.2% 

2. Miami

  • Number of housing units with a mortgage: 735,412 
  • Share of households spending 30% or more of their monthly income on housing costs: 40.7%

3. San Diego

  • Number of housing units with a mortgage: 428,929 
  • Share of households spending 30% or more of their monthly income on housing costs: 39.2% 

Metros where the lowest share of owner-occupied households spend at least 30% of their income on housing costs

1. Indianapolis

  • Number of housing units with a mortgage: 361,500 
  • Share of households spending 30% or more of their monthly income on housing costs: 19.7%

2. Raleigh, N.C.

  • Number of housing units with a mortgage: 240,911 
  • Share of households spending 30% or more of their monthly income on housing costs: 19.9% 

3. Buffalo, N.Y.

  • Number of housing units with a mortgage: 189,150 
  • Share of households spending 30% or more of their monthly income on housing costs: 20.4%

Tips to reduce your monthly housing costs

For cost-burdened households — especially those that don’t have a clear path toward earning a higher income — it can be beneficial to find ways to lower monthly housing costs.

Here are a few tips on how to do that:

Work on getting rid of mortgage insurance

If you made a less-than-20% down payment toward your home purchase, odds are you’re paying for mortgage insurance each month. Fortunately, if you have a conventional loan, your mortgage insurance automatically goes away once your loan principal balance reaches 78% of your home’s value. Alternatively, you can ask your lender to remove your mortgage insurance once you’ve built up at least 20% equity in your home.

Refinance your loan to get a lower interest rate

If you have a strong credit profile, getting a mortgage refinance to lock in a lower rate might be a good way to help lower your monthly mortgage payments and, in turn, your total monthly housing costs. Because rates are still relatively low, now might be an especially good time to consider refinancing.

Consider asking for a loan modification

If you’re having serious trouble keeping up with your housing costs, you may be able to qualify for a mortgage modification. Depending on the type of loan you have and the kind of modification program you qualify for, you could see up to a 20% reduction in your monthly mortgage payment amount.

Methodology

LendingTree used data derived from the 2019 American Community Survey with five-year estimates — the latest survey available at the time of this study’s writing — to conduct this study at the metropolitan statistical area (MSA) level.

We calculated the percentage of income a household spends on monthly housing costs by dividing that household’s total income by the total amount it spends on housing costs, which include mortgage payments and additional costs such as homeowners insurance and property taxes.

All data is exclusively for owner-occupied housing units with a mortgage. As a result, LendingTree’s study doesn’t factor in households that are renting or those that have paid off their mortgages.

Senior research analyst Jacob Channel contributed to this study.

 

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