As housing costs rise, more Americans are being forced to break a long-held home-budgeting guideline: the “30 percent rule,” which states that your home is “cost burdened” if you spend more than 30 percent of your income on housing. Newly released U.S. Census Bureau data shows that in 2024, elevated mortgage and insurance fees have pushed homeowners in several states outside this boundary.
While the average American homeowner with a mortgage was spending just about 30 percent of the median household income on housing costs in 2024, people in some states required more. New York and California topped the list of the least affordable places for homeowners to live, with residents spending an estimated 36 percent of income on housing costs. In Hawaii and Washington, D.C., homeowners were spending 35 percent. (Housing costs include mortgages, insurance, real estate taxes, utilities, fuels, mobile home costs and condominium fees.)
Nearly 60 percent of all homeowners were paying a mortgage in 2024, with the 30-year fixed-rate mortgage rate hovering between 6 and 7 percent. Median housing costs for these households increased about 4 percent year over year, from $1,960 to $2,035 a month, adding to the 3 percent increase from 2022-23.
Homeowners in Washington, D.C. ($3,181), California ($3,001), Hawaii ($2,937), New Jersey ($2,797) and Massachusetts ($2,755) had the highest median monthly costs. But some of the largest year-over-year costs for homeowners with mortgages were in Southeastern states, including Florida, the Carolinas, Georgia, Mississippi, Alabama and Tennessee.
Adding to the burden, median property insurance costs increased more than 5 percent nationwide between 2023 and 2024. For homes with four or more bedrooms, the increase was almost 10 percent.
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