The Rent is (Way) Too High: #2 (For Owners, Too)

In a previous blog post , we observed that a majority of renters in Metro Atlanta are cost-burdened,[1] at a higher rate than the nationwide average. We also observed differences in cost-burden rates among renters of different racial/ethnic groups, with the greatest disparity lying between non-Hispanic Whites and Blacks. What do cost burden rates look like for owner-occupied households?

To answer this question, we return to the published data tables addressing housing cost burden by race and ethnicity new in the latest release of the 1-year American Community Survey.

Figure 1 below compares the percentage of cost-burdened owners by subgroup for the 29-county Atlanta MSA and the nation as a whole:

As Figure 1 shows, about 21.8% of homeowners in Metro Atlanta are cost-burdened, a rate slightly lower than the nationwide figure of 22.1%.[2] This stands in contrast to the higher rates among renters we observed in the previous post. This finding extends to all major racial/ethnic groups in our region, though again the disparities between Black and Non-Hispanic White households are very sharp—a difference of nearly 12 percentage points.

Figure 2 that follows shows the percent of owner-occupied households that are cost-burdened for each of the eleven counties in the ARC region:

As seen in the above chart, Rockdale and Clayton counties have the highest rates of cost-burdened owners, while Cobb and Cherokee have the lowest.

Figure 3 below presents the percentage of cost-burdened households by race by county

Figure 3 above shows that Black homeowners are cost-burdened at greater rates across the board,[2] with the largest gaps in Clayton and Henry Counties (17 points each). The differences in cost-burdened rates between Black and Non-Hispanic White homeowners are smallest in Fayette County (2 percentage points) and Cherokee County (0.6 percentage points).

Why are owners less likely to be cost-burdened than renters, when it costs so much to buy a home? One potential answer lies in what it takes to qualify for a loan. Lenders will typically limit how high they will allow payments to be based on your income.

How does Metro Atlanta compare to other major metros in cost burdens for housing? We will take that up in the next and final post (#3) in this series.

Notes 

[1] This means that they spend 30% or more of their income on housing, including utility costs.

[2] This is different from what we found previously among renters, where Non-Hispanic White households were cost-burdened at greater rates than Black households in Cherokee and Douglas counties. Data are suppressed for Black owner-occupied households in Forsyth County, presumably due to sample size.