Housing affordability and stability are essential elements of households’ financial security. Rent or mortgage payments are generally the largest regular expense families must manage. Where a family lives, in what conditions, and how much of their income they must devote to housing affects their job opportunities, earnings, other costs of living, health, educational opportunities, and more. Experiencing housing instability—which can include overcrowded living conditions, multiple moves during a short period, eviction, and displacement, among other forms—has profoundly negative impacts on adults’ employment and children’s cognitive and social development and education outcomes. In contrast, for low-income households, having stable housing that they can afford contributes to greater financial security and wellbeing than those who are housing cost-burdened or experiencing instability.
Today, households face significant and rapidly growing housing costs, while income growth has not kept up. Over the past three decades, median rents and median home prices have grown at rates significantly higher than inflation and wage growth. In 2018, one in three US households were housing cost-burdened, spending more than 30% of their income for housing. The problem is most acute for low-income households, three in four of whom are cost-burdened.
EPIC has selected housing affordability and stability as our next issue because it is increasingly difficult to have financial security if housing is too expensive or unstable. The need has never been greater for the lowest-earning families and these challenges are increasingly common among the middle class. As one EPIC expert survey respondent put it, “Housing insecurity is coming up in nearly every conversation. It is not typically seen as a financial inclusion or access issue (except homeownership) and yet the proportion of a household balance sheet that is taken up by this expense is growing in ways that simply must be addressed.”
● Foundational Brief
● The Housing Timeline
EPIC is an initiative of the Aspen Institute's Financial Security Program.