Middle-class homeowners are increasingly squeezed by housing costs
Almost 30% of middle-class homeowners bought homes with monthly payments costing more than 30% of their income in 2022, an NBC News analysis of Census Bureau data found. That’s more than twice the share from 2013, with experts warning it leaves many households with less money for groceries and emergencies and less able to get ahead in the future.
That “cost-burdened” benchmark — in which a household devotes over 30% of income to housing costs — is a widely used measure of affordability for both homeownership and renting. The Census Bureau measures housing costs against it, and the Department of Housing and Urban Development has used it for decades.
“It used to be that if you made the median income, you could afford the median-priced house,” said Domonic Purviance, a housing expert at the Atlanta Federal Reserve. “That’s not the case anymore.”
When Haley and Ben Williams purchased their home Elkhart, Indiana, in December 2023 for $265,000, they accepted a challenging financial scenario. Their mortgage rate was 8.125% — above the roughly 7% national average at the time, which was hovering near 20-year highs. The couple estimated their monthly costs would include spending $176 on the principal and more than $2,000 on interest, taxes and insurance.
