Adding to the strain of life in the pandemic, for many Americans the cost of housing has continued to take bigger and bigger bites of their budgets. During the past year, house prices have shot upward due to unusual economic conditions, strong demand for homes and record low inventory. The average sale price of a home in the U.S. rose nearly 16% between the second quarter of 2020 and second quarter of 2021, according to Department of Housing and Urban Development data, to produce one of the largest year-over-year increases on record.
As housing costs increase, families have less money available to spend on other items, including necessities. More than 40% of U.S. homeowners spend more than 20% of their incomes on housing, with more than one in five spending 30% or higher.
Using data from the U.S. Census Bureau, Zillow, and the U.S. Bureau of Economic Analysis researchers with Filterbuy calculated the median monthly housing costs as a share of median monthly income by location. They found that New Jersey residents spend the second-most (20.2%) on housing relative to income of all the states. Californians spent the most (21.1%); the national average cost of housing as a share of income was 16.5%.
Summary of data for New Jersey:
- Median monthly housing costs as a share of income: 20.2%
- Median monthly housing costs: $1,890
- Median monthly household income: $9,336
- Current median home price: $415,066
- Overall cost of living (compared to average): +16.0%