Housing affordability for low- and moderate-income working households has improved slightly since 2011, according to a new report by the Center for Housing Policy.

Between 2011 and 2012, the share of severely burdened working renters declined for the first time since the end of the recession—from 26.4 percent to 25.4 percent, says the Housing Landscape 2014 report. Despite the improvement, there were 5.9 million severely cost burdened working renters, nearly 350,000 more than there were in 2009 at the end of recession.

Severely cost burdened households are those that spend more than half of the incomes on housing costs.

The story is better for working owners. The share of these households with severe cost burdens declined for the second year, from 20.9 percent in 2011 to 18.6 percent in 2012. Owners experienced earlier, and greater, improvements in housing affordability than renters largely because of the declines in housing costs and the ability to refinance at lower interest rates.

In contrast, working renters have faced steadily increasing rents since 2009, says the Center, the research arm of the National Housing Conference. However, they also saw an increase in their incomes. Median household wages increased 4.2 percent for working renters and 3 percent for working owners between 2011 and 2012.

Working households are defined in the report as households whose members work a total of at least 20 hours per week on average, and where household income does not exceed 120 percent of the area median.

Even with the recent improvements, housing costs remain a significant burden, say researchers.

“The increase in renter incomes is certainly positive, but we don’t know what the future will bring,” says Janet Viveiros, research associate and lead author on the report. “Without an increase in the number of available rental units over the next few years, particularly where demand for rental housing is high, rents will continue to increase. If incomes stagnate or don’t match the increase in rents, we could see even more working renters with severe housing challenges.  It is important to remember that a quarter of all working renters are still severely cost burdened.”

Working households who spend half or more of their income on housing have trouble affording other essentials like food, health care, and transportation, says Lisa Sturtevant, director of the Center. “Spending on non-essentials will also go down when households spend a disproportionate share of their income on housing,” she says. “Lower household spending is a drag on the slowly recovering economy.”

Housing Landscape 2014 also finds that the lowest-income households continue to experience the greatest housing cost burdens. Nearly eight in 10 extremely low-income working households—those earning 30 percent or less of the area median income—are severely cost burdened, and over a third of very low-income working households—those earning 31 to 50 percent of the area median income— face severe housing cost burden.

These figures likely underreport the cost burden experienced by low-income households, as underemployed and nonworking households, such as those including seniors and persons with disabilities, are not counted in the analysis.

Among the 50 states and the District of Columbia, the following five had the highest share of low- and moderate- working households with a severe housing cost burden in 2012:

  • California: 32%
  • New Jersey: 31%
  • Florida: 30%
  • Hawaii: 30%
  • New York: 29%

Among the 50 largest metropolitan areas, the following five metropolitan areas had the highest share of low- and moderate-working households with a severe housing cost burden in 2012:

  • Miami-Fort Lauderdale-Pompano Beach: 38%
  • Los Angeles-Long Beach-Anaheim.: 38%
  • New York-Newark-Jersey City: 35%
  • San Diego-Carlsbad: 32%
  • Orlando-Kissimmee-Sanford, Fla.: 32%

For more information, visit the Center for Housing Policy.