The High Burden of US Housing Costs

Housing represents a growing source of budgetary pressure for Americans, and the data suggests American's desire for space is at least partially to blame. In 2017, housing represented 33 percent of total US household expenditures, with rent and mortgage—as compared to other household expenses like furnishings and utilities—making up about 60 percent of the household budget, according to the US Bureau of Labor Statistics. 

• Renters have been particularly hard hit, with more than 40 percent spending 35 percent or more of their income on housing.
• While only about 20 percent of mortgage holders spend that much of their income on housing, mortgages still represent the largest component of US household debt. 

Reducing financial stress comes down to housing and rental prices for many Americans and with it, for some, reevaluating the need for space. 

• Research from TD Ameritrade found that people who save 20 percent or more of their income, so called "super savers", tend to spend less on housing (only 14%) than the rest of the population. That makes them feel freer and more financially secure.
• New homes today are bigger than they were in 1970s even as the average household size has decreased, resulting in more living space per person. Most American households now live in houses with four to seven rooms*. 

* The US Census Bureau definition of 'rooms' includes: living rooms, dining rooms, kitchens, bedrooms, finished recreation rooms, enclosed porches suitable for year-round use, and lodgers' rooms.