Housing costs in North Carolina have increased significantly since the pandemic, leading to a rise in the number of residents spending a larger portion of their income on rent or mortgage payments. This trend has been ongoing for over a decade, with nearly half of renter households and one-in-four homeowner households being classified as “cost burdened” by the U.S. Department of Housing and Urban Development in 2023.
The term “cost burdened” refers to households spending 30% or more of their income on housing and utilities. Despite recent increases in home prices, cost burden issues have persisted for years. From 2010 to 2023, the percentage of cost-burdened homeowners slightly decreased, while the rate among renters remained stable at around 50%.
A significant factor contributing to this disparity is the difference in median household incomes between homeowners and renters. In 2023, homeowners had a median income of $102,228 compared to $48,270 for renters. Although both groups saw income growth from 2010—homeowners by 58% and renters by 83%—the gap between them widened in dollar terms from $38,415 to $53,958.
Despite these income gains for renters, their cost burden remains high because monthly housing costs have kept pace with income growth. Since 2010, renter incomes grew by 83%, slightly outpacing housing cost increases of 70%. Homeowners experienced a more favorable situation with their incomes growing by 58%, while housing costs rose only by 26%.
These findings underscore the ongoing challenges faced by renters in North Carolina. The data reveals that while both homeowners and renters have experienced rising incomes over time, nearly half of all renters continue to spend at least 30% of their income on housing costs.
To address this issue effectively requires considering alternative measures beyond the standard threshold for cost burdened households. The residual income method suggests that many more households may be facing financial strain than previously estimated, especially those with children.
Improving housing affordability is crucial not just for individual household stability but also for ensuring economic health across communities statewide.
