TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1475526
M REPORT | 57 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 Household incomes are inflated to 2020 dollars using CPI-U All Items, according to JCHS tabula- tions of US Census Bureau, 2019 & 2020 Experimental American Community Survey 1-Year Estimates. Cost burdens rose fastest among renter households headed by a Black person, widening the existing Black-white affordability gap. Cost burden rates increased 3.5 percentage points for Black renter households, reaching 51% in 2020. White households also saw their cost burden share increase rapidly by nearly 3 percentage points, but these renters continued to have the lowest burden rates at 42%. Meanwhile, Asian-, Hispanic-, and multiracial-headed renter households fared only slightly better with about a 2-percentage point increase in their burden rates. Older Adult Renters Had the Fastest Cost Burden Increases The findings show the percent- age point increase in cost burden shares by age of the householder and the cost burden rates by age for 2019 and 2020. Households headed by an older adult had the largest increase in cost burden rates at about 5 percentage points. Households headed by someone aged 25-34 or 35-44 had the low- est rate of increase at about 1.5 percentage points. The increase for older adults pushed their cost burden rate above 50 percent. Meanwhile, younger households headed by someone under age 25 had the highest cost burden rate, reaching 58% in 2020. Single-person renter households experienced the largest jump in cost burdens of all household types at 5 percentage points, likely related to the fact that older adults make up nearly a third of these households. It's also possible that having only one earner meant that single-person households were less able to cope with rising rents and employment income losses in the first year of the pandemic. Interestingly, single parent renters, who have the highest burden rate at 58% and who may have been most likely to lose employment income due to childcare disruptions, saw their burden rates rise by just under 2 percentage points. Cost Burdens Rose Quickly for Single-Person Renter Households The findings show the per- centage point increase in cost burden shares by household type and the cost burden rates by household type for 2019 and 2020. Single-person renter households had the largest increase in cost burden rates at about 5 percentage points. Married households with children had the lowest rate of increase at less than 0.5 percentage points. Single parent households continued to have the highest cost burden rate at nearly 60% while the increase among single-person households pushed their rate up to 56%. The experimental ACS data show that widening affordability gaps by income, race, and house- hold type in the first year of the pandemic compounded existing inequities. Income supplements through expanded unemployment insurance and stimulus checks likely helped offset worsening cost burdens for some. Meanwhile, the overall rise in already high renter cost burden rates is troubling, par- ticularly among the lowest-income and Black renter households. SOMETIMES, IT'S GOOD TO BE A FOLLOWER. Follow MReport on social media to put the latest mortgage banking news, stories, strategies, and insights at the touch of your fingertips. MReport @TheMReportNews The MReport