A long-standing guideline for financial health is being challenged as new data reveals a growing number of American homeowners are now spending more than 30% of their income on housing. According to the latest figures from the U.S. Census Bureau, rising mortgage rates and associated homeownership expenses pushed the national average to the brink of this affordability threshold in 2024, with some states far exceeding it.
The data highlights a significant financial strain on households, particularly in states like New York and California, where homeowners now allocate an estimated 36% of their income to housing costs. This trend indicates a widening gap between wages and the cost of maintaining a home, forcing many to re-evaluate their budgets.
Key Takeaways
- New U.S. Census Bureau data shows the average American homeowner with a mortgage spent about 30% of their income on housing in 2024.
- Homeowners in New York and California are the most cost-burdened, spending 36% of their income on housing. Hawaii and Washington D.C. follow at 35%.
- Florida saw the largest year-over-year increase in housing costs for mortgage holders, rising by 8.0%.
- Median monthly housing costs for those with a mortgage increased by 4% nationwide, from $1,960 in 2023 to $2,035 in 2024.
The 30 Percent Rule Under Pressure
For decades, financial advisors have promoted the “30 percent rule” as a benchmark for housing affordability. The guideline suggests that households spending more than 30% of their gross income on housing are considered “cost-burdened.” Spending over 50% is classified as “severely cost-burdened.” New data indicates this benchmark is becoming increasingly difficult for many Americans to meet.
While the national average for homeowners with a mortgage hovers right at the 30% line, this figure masks significant regional disparities. The data shows a clear divide, with several states pushing well past this critical financial marker. This pressure is largely driven by elevated mortgage rates, which remained between 6% and 7% for a 30-year fixed-rate loan throughout much of 2024.
What Are Housing Costs?
The U.S. Census Bureau's calculation of housing costs is comprehensive. It includes not only principal and interest on mortgages but also a range of other essential expenses: real estate taxes, property insurance, utilities (electricity, gas, water), fuels (oil, coal), and any applicable condominium or mobile home fees. This provides a complete picture of the financial commitment of homeownership.
The consistent rise in these costs places a direct strain on household budgets. With less disposable income, families may be forced to cut back on other necessities such as savings, healthcare, or education. Nearly 60% of all homeowners in the United States were paying a mortgage in 2024, making this a widespread economic issue.
States Facing the Steepest Increases
The latest census data identified ten states where housing costs for mortgage holders grew most rapidly between 2023 and 2024. Florida led the nation with an 8.0% increase, pushing the median monthly cost from $2,007 to $2,168.
Several other states, primarily in the Southeast, also experienced sharp rises. North Carolina saw a 7.6% jump, while South Carolina and Georgia followed with increases of 7.1% and 7.0%, respectively. This pattern highlights a regional trend where housing affordability is deteriorating faster than in other parts of the country.
Top 5 States by Housing Cost Growth (2023-2024)
- Florida: +8.0%
- North Carolina: +7.6%
- South Carolina: +7.1%
- Georgia: +7.0%
- Wyoming: +6.7%
Other states on the list include Wyoming (6.7%), Mississippi (6.4%), Alabama (6.2%), Tennessee (5.8%), Missouri (5.7%), and New Mexico (5.4%). These figures reflect a broad trend of rising costs that extends beyond the traditionally expensive coastal markets.
The National Picture of Affordability
On a national level, the median monthly housing cost for households with a mortgage climbed by approximately 4% in 2024. This increase, from $1,960 to $2,035, continues an upward trend observed in previous years. From 2022 to 2023, costs had already risen by 3%, signaling a persistent affordability challenge.
Where Homeownership Consumes the Most Income
While some states are seeing rapid cost growth, others remain the most expensive in absolute terms. The data underscores the intense financial pressure on homeowners in high-cost-of-living areas.
- New York & California: Homeowners in these states spend an average of 36% of their income on housing.
- Hawaii & Washington, D.C.: Residents here are not far behind, allocating 35% of their income to home-related expenses.
These percentages are well above the recommended 30% threshold, indicating that a significant portion of residents are cost-burdened. This situation can have long-term economic consequences, limiting household savings and investment capabilities and potentially slowing down local economic growth.
Implications for Homebuyers and the Economy
The steady climb in housing costs presents a formidable barrier for prospective homebuyers and a growing burden for existing ones. The combination of high interest rates and rising ancillary costs like insurance and taxes makes qualifying for a mortgage and managing monthly payments more difficult than ever.
This affordability crisis could have ripple effects across the economy. When a larger share of income is devoted to housing, consumer spending in other sectors may decline. It also raises concerns about financial stability, as cost-burdened households are more vulnerable to economic shocks, such as job loss or unexpected medical expenses.
As policymakers and financial institutions observe these trends, the challenge will be to find solutions that can help stabilize housing costs and ensure that homeownership remains an attainable goal for American families. Without intervention, the dream of owning a home may drift further out of reach for a growing number of people across the country.
