Nearly one in four working households is spending more than half of its income on housing, according to a new study by the Center for Housing Policy.

Even as home prices declined, housing affordability worsened sharply for both homeowners and renters between 2008 and 2010, said Laura Williams, a research associate at the Center and author of the report.

Williams examined households that worked at least 20 hours per week, on average, and with incomes no more than 120 percent of their area median income. There were approximately 45.1 million of these households in 2010, just about evenly split between homeowners and renters.

She found that 23.6 percent of these households, or 10.6 million, were paying more than half of their income for housing, including utilities, an increase from 21.8 percent in 2008.

The generally accepted standard of affordability is to spend no more than 30 percent of your income on housing. Households that have to pay more than 50 percent are considered to have a severe housing cost burden.

Williams found a growing share of renters carrying this burden as a result of falling incomes and rising rents.

Overall, renters saw their incomes decline by 4 percent while their housing costs increased 4 percent during the two-year period. Rents continued to go up because of strong demand for apartments.

“A lot of families choose to rent because it allows them to be more mobile in a down job market,” Williams said. Families are also postponing buying a home or have gone through a recent foreclosure, making renting their only option at this time.

As a result, the share of working renters that are severely burdened increased to 25.6 percent from 22.8 percent in 2008.

The situation also worsened on the homeownership side. “Although home prices have dropped in the last few years, that doesn’t mean housing is affordable,” Williams said.

For homeowners, housing costs dipped 2 percent, but their incomes decreased by 5 percent. The drop in earnings was attributed to many homeowners being laid off or having their hours cut. In addition, many families bought their homes before the sharp fall in prices so their housing costs do not reflect today’s lower prices.

 This pushed the share of working owners paying more than half of their income for housing to 21.6 percent in 2010, up from 20.8 percent in 2008.

The five states with the highest share of working households with a severe housing cost burden are:

  • California, 34 percent;
  •  Florida, 33 percent;
  • New Jersey, 32 percent;
  • Hawaii, 30 percent, and,
  • Nevada, 29 percent.

Among the 50 largest metropolitan areas, the following five had the highest share of working households with a severe housing cost burden:

  • Miami-Fort Lauderdale-Pompano Beach, Fla., 43 percent,
  • Los Angeles-Long Beach-Santa Ana, Calif., 38 percent,
  • San Diego-Carlsbad-San Marcos, Calif., 37 percent,
  • Riverside-San Bernardino-Ontario, Calif., 35 percent, and,
  • New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa, 35 percent.

The Center for Housing Policy is the research affiliate of the National Housing Conference. For more information, visit