Americans are becoming increasingly house poor.
Homeowners in every state but one spent more of their incomes on housing costs last year than at the start of the decade, according to U.S. Census Bureau data released today. Those in Alaska spent the same.
Nationwide, homeowners spent nearly 21 percent of their incomes on housing costs last year, up from just under 19 percent in 1999.
Housing analysts blamed surging home prices, higher interest rates and lower incomes for hurting affordability.
“It is now much more difficult for first-time home buyers to get into the market and for existing homeowners to trade up,” said Mark Zandi, chief economist at Moody’s Economy.com. “This decline in affordability is the catalyst for the current sharp decline in housing activity.”
The housing market has gone soft in many areas, but home prices are still much higher than they were at the start of the decade. Nationwide, median home values jumped 32 percent from 2000 to 2005, to $167,500.
Household incomes have not kept up, dropping 2.8 percent during the same period.
“Until incomes catch up, the housing market is going to remain flat,” Mr. Zandi said.
America’s homeownership rate is at a near-record 68.7 percent. But some housing advocates warn that declining affordability will make it difficult for low-income owners to keep their homes.
For example, the government said housing costs are excessive if they top 30 percent of household income. Nationally, 34.5 percent of homeowners with a mortgage had housing costs that topped that benchmark in 2005, an increase from 26.7 percent in 1999.
The percentage of homeowners exceeding the benchmark increased in every state but one during the period. In Hawaii, it stayed the same at 39.7 percent.
Housing costs are defined as mortgage payments, taxes, insurance and utilities.
“Families want to become homeowners and they are willing to spend more to get there,” said Jeffrey Lubell, executive director for the Center for Housing Policy, which advocates for affordable housing.
“But as they spend more and more, they are taking on mortgages that could put their homeownership at risk,” Mr. Lubell said.
The Census Bureau released 2005 housing data from the American Community Survey, which is replacing the “long form” on the 10-year census. Starting this year, the annual survey of about 3 million households provides yearly data on communities of 65,000 or larger. By 2010, it will provide annual multiyear averages for the smallest neighborhoods covered by the 10-year census.
California stands out among the states with expensive housing costs. It ranked No. 1 in median home value, at $477,700; No. 2 in monthly housing costs for homeowners, at $1,912; and No. 2 for renters, at $973.
Nearly half of California homeowners — 48 percent — spent more than 30 percent of their incomes on housing last year.
“We really are reaching the outer edge of the envelope of what people can manage,” said Cynthia Kroll, senior regional economist at the University of California at Berkeley.
Among the other findings released yesterday:
New Jersey had the highest monthly housing costs for homeowners, at $1,938.
West Virginia had the least-expensive monthly costs for homeowners, at $797.
Hawaii had the highest monthly costs for renters, at $995.
North Dakota had the lowest monthly costs for renters, at $479.
Mississippi had the least-expensive median home value, at $82,700.
Among America’s 15 largest cities, San Francisco had the most expensive homes, with a median value of $726,700. Detroit had the least expensive, at $88,300.