September 29, 2010
California mortgage holders dealing with highest housing burden
During the income verification process, the federal standard for affordable housing is that a homeowner should spend no more than 30 percent of their income on housing costs. But in many states, a large percentage of homeowners exceed that limit, putting them at higher risk for default.
Newly-released 2009 Census data shows that 37.6 percent of all homeowners with mortgages spend more than 30 percent of their income on housing costs - including payments, taxes, insurance and utilities.
California homeowners were in the worst shape in terms of affordable housing costs, which occupied more than 30 percent of borrowers' income in more than 52 percent of cases, while 49.9 percent of homeowners in Nevada were in a similar situation. By contrast, just 21.3 percent of home loan borrowers in North Dakota exceeded the government's affordable housing limits.
The data also showed significant differences between people who lived in urban and rural areas. More than 38 percent of homeowners in urban areas had housing costs greater than 30 percent of their income, while the same was true for just 34.4 percent of rural homeowners.
Many of those states with high housing costs are also experiencing high rates of foreclosures. According to RealtyTrac, Nevada has experienced the highest foreclosure rate in the country for each of the last 44 months, while California finished fourth in August.