Stretched Thin: The Impact of Rising Housing Expenses on America's Owners and Renters

Housing Woes Extend Beyond Mortgage Payments, Families Facing Sharp Increases in Variety of Housing Costs

October 8, 2008

The housing woes of America’s families extend beyond higher mortgage payments to include large increases in a wide-variety of other housing expenses, according to a new study entitled Stretched Thin: The Impact of Rising Housing Expenses on America’s Owners and Renters. Conducted by the Center for Housing Policy, the research affiliate of the National Housing Conference, the study reveals that mortgage payments are only one of several factors contributing to the challenge of rising housing expenses, and that this problem is adversely affecting virtually all segments of the housing market – homeowners and renters, new and longtime homeowners, and households with and without mortgages.

Specifically, between 1996 and 2006, all the major categories of homeowner expenses increased faster than incomes. Mortgage payments increased 46 percent, utilities 43 percent, property taxes 66 percent, and property insurance 83 percent. By contrast, homeowner incomes increased by 36.3 percent. Rental costs also increased faster than incomes. Rents increased by 51 percent between 1996 and 2006, while renter incomes increased only 31.4 percent over the same period. The study further found that large increases since 2006 in the cost of heating oil, natural gas, and gasoline have further stretched families’ budgets.

For detailed data about the impact of rising household expenses, please go to:

1. Media Release: Housing Woes Extend Beyond Mortgage Payments, Families Facing Sharp Increases in a Variety of Housing Costs

2. View Full Study: Stretched Thin: The Impact of Rising Housing Expenses on America's Owners and Renters, 2008

3. Fact Sheet: Housing Expense Trends and Policy Recommendations

4. Key Utility Findings– Natural Gas, Fuel Oil, Electric and Water


Rising utility costs affect household budgets for people of all income levels and at all housing market segments – including homeowners and renters, new and longtime homeowners, and households with and without mortgages. The new study entitled Stretched Thin: The Impact of Rising Housing Expenses on America’s Owners and Renters reveals that the utility bills of homeowners, which include electric, natural gas, fuel oil (also commonly referred to as heating oil) and water, rose 43 percent from 1996 to 2006 compared with a 36 percent increase in their median income. Renters paying separately for these items experienced similar increases.

The study further notes that fuel oil and natural gas costs have been rising in recent years. During the 1996 to 2006 period, fuel oil prices increased 131 percent, from $1.05 to $2.43 per gallon, and jumped another 52 percent to $3.69 per gallon in 2008. Over the same period, natural gas prices more than doubled from $6.34 per thousand cubic feet in 1996 to $13.75 in 2006 and further increased to $14.30 in 2008. Electricity comprises a large share of household utility usage in the South and West, but its average price has held relatively steady. Households in the West tend to spend more on the combination of water, sewer, trash and septic bills than other regions.

For specific information about Regional Utility Usage Trends and Fuel Oil, Natural Gas and Electricity Price Increases, please see the following Fact Sheets:


Acknowledgements

Support and development for "Stretched Thin" was provided by the Chicago Dwellings Association.

The Center also thanks Kathryn P. Nelson for her comments on an early draft of this report. The advice and comments of Jeffrey Lubell, executive director for the Center for Housing Policy, and Mary Cousins, director of membership and administration for the National Housing Conference, were also greatly appreciated.

 

Additional Relevant Resources From the Center for Housing Policy:

Visit HousingPolicy.org – an easy-to-use online guide to state and local housing solutions developed and maintained by the Center for Housing Policy.

Why Housing Matters: Housing’s Connections to Health and Education

Center for Housing Policy’s “Housing Solutions” Handbook (PDF)