19 million U.S. homeowners "financially burdened"

by Tina Kells | September 23, 2008 at 08:48 am

214 views | 0 Recommendations | 0 comments

In the banking world, the term "financially burdened" applies to homeowners with housing cost equal to or greater than 30% of total household income. A study conducted by the U.S. Census Bureau shows that 38% of American homeowners fall into the financially burdened category.

What is more startling is the number of the financially burdened homeowners with housing costs of 50% or greater is growing. 7.5 million Americans now break the bank with 50% or more of their total income being spent on housing.

Ray, 44, is looking for work and renting out a room in his two-bedroom condo in Davie, Fla., for $500, but his monthly income doesn't match his expenses and he's facing foreclosure.

"I barely have money to survive," he said.

Ray is one of more than 7.5 million people — almost 15 percent of American homeowners with a mortgage — who are spending half of their income or more on housing costs, according to 2007 data released Tuesday by the U.S. Census Bureau. That is up from nearly 7.1 million the year before.

Traditionally, the government and most lenders consider a homeowner spending 30 percent or more of their income on housing costs to be financially burdened. But that definition now covers almost 38 percent of American homeowners with a mortgage — 19 million of them.

Though home prices have fallen this year, in the most expensive markets where home prices tripled during the boom, many working families still cannot afford to buy a home.

In the current corporate bailout centered U.S. economy, statistics like this beg the question, "what will the government do to help the average homeowner?" With tough economic times ahead for all Americans perhaps the government needs to consider helping the average citizen as well as the banking giants.

0 See all footage | View Slideshow

Share: email story | add to any | | facebook | stumbleupon