CAMBRIDGE, Mass.–A new analysis suggests that more than 38 million American households are unable to afford their housing, an increase of 146% in the past 16 years.
The numbers were released as part of the latest “State of the Nation’s Housing” report from the Joint Center for Housing Studies of Harvard University.
The report used federal guidelines, which state that households that spend more than 30% of their income on housing costs are considered "cost burdened" and are challenged to afford basic necessities like food, clothing, transportation and medical care.
The number of Americans struggling with housing costs has risen from almost 16 million in 2001 to 38 million in 2015, according to the Census data crunched in the report, the Harvard report found.
Even with the recent improvement in the economy, since 2014 the number of people who are “cost-burdened” declined by just 900,000 since 2014.
It isn’t just people who are struggling with payments who are affected by the housing situation, according to the Harvard analysis. Dan McCue, a senior research associate at the Joint Center for Housing Studies, said housing unaffordability also hurts the overall economy.
"It forces them to constrict spending on other items, which would reduce spending on other parts of the economy. They would buy less, save less, reduce savings," McCue told NBC News. "It may make it more difficult to venture out and start a new company — or, living month to month, they're much less likely to go back to school and get additional training; and may not be in the job that makes them the most productive member of the labor market.”
The biggest factor in housing affordability has been the lag in wages even as employment has grown.