MReport August 2022

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56 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA The Black-White Affordability Gap for Renters Widened in 2020 New experimental data from the American Community Survey revealed that cost burdens rose the fastest among families headed by a Black person, as Black renter household rates increased an overall 3.5 percentage points, reaching 51% in 2020. I n 2020, with the onset of the COVID-19 pandemic, a large and rapidly growing share of renters were cost- burdened, according to a Center analysis of new experimental data from the American Com- munity Survey (ACS). With commentary by Senior Research Associate Whitney Airgood-Obrycki and Senior Research Analyst Alexander Hermann, ACS has examined recent research, trends and hous- ing perspectives surrounding homeownership, along with the significant racial and financial divide between buyers during the coronavirus pandemic. From 2019 to 2020, the share of renter households with cost burdens rose nearly 3 percent- age points. Among renters, the pandemic widened socioeconomic and racial inequalities in housing cost burdens. In a previous blog, it was noted that the 2020 ACS suffered from data collection issues due to the pandemic, which resulted in nonresponse bias the Census Bureau couldn't fully account for with their typical weighting methodology. The Census released experimental data for 2020 with new weights, though these data are essentially incomparable to previous years. Cost-burdened renters spend more than 30% of their incomes on rent and utilities each month. In 2020, the share of burdened renters reached 46%, up a full 2.6 percentage points from the year before. Pandemic job losses that hit renters especially hard widened the affordability gap between owners and renters. Owner cost burden rates rose just 1.0 percentage point in 2020, increasing the gap in cost burdens between owners and renters to nearly 25 percentage points. Before the pandemic, cost burdens were highest for lower- income renter households and ris- ing fastest among middle-income renters. This trend continued in the first year of the pandemic. Cost burdens increased by nearly 5 percentage points, to 80%, for households making less than $30,000. Renters making $30,000-$45,000 saw their cost burden rate jump by an astounding 9 percentage points to 58%, while those making $45,000-$75,000 posted rates of 30%, a 5-percentage-point rise from 2019. Higher-income households maintained a relatively low bur- den rate of 8%, less than 2 percent- age points above 2019 levels. Key Findings The Black-White Affordability Gap Widened for Renters The findings show the percent- age point increase in cost burden shares by race/ethnicity of the householder and the cost burden rates by race/ethnicity for 2019 and 2020. Households headed by a Black person had the largest increase in cost burden rates at about 3.5 percentage points while Asian and Hispanic households had the lowest increases. With these increases, more than half of Black- and Hispanic-headed renter households are cost burdened. White-headed households contin- ued to have the lowest rate at just over 40%. Across age categories, cost bur- den rates increased most rapidly for renter households headed by someone age 65 or older with a rise of 5 percentage points. Older adult household incomes rose slower compared to other age groups. This may be due, in part, to the high share of older adult households that rely heavily on social security income. In 2020, the cost-of-living increase for social security was just 1.3% while median rents for older adults rose much faster. These rent increases put the older adult cost burden rate at 55% in 2020. Only the youngest renter households headed by someone under age 25 had higher cost burden shares at 58%, following a 4-percentage point increase in 2020. Middle-Income Renters' Cost Burdens Soared in 2020 The findings show the percent- age point increase in cost burden shares by income and the cost burden rates by income for 2019 and 2020. Households making between $30,000 and $45,000 had by far the largest increase in cost burden rates at about 9 percent- age points. Despite this increase, households making less than $30,000 continue to have the high- est cost burden rate at a whop- ping 80%. Notes: Moderately (severely) cost-burdened households pay more than 30% up to 50% (more than 50%) of household income for housing. Households with zero or negative income are assumed to be severely burdened, while households paying no cash rent are assumed to be unburdened.

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