Indicator: 45 - Family Housing Costs

Why This Is Important

Housing is a major expense for most families; however, spending more than 30% of income on housing may compromise the budget for other essential goods and services. Nationally the share of all households (containing children) spending at least 30% of their incomes on housing increased from 15% in 1978 to 28% in 1995, while the share spending at least half their income on housing doubled from 6% in 1978 to 12% in 1995. For renter households with children and very low income the trend was similar, but housing expenses were a much higher share of income.

Where We Stand

This Maine data seems to reflect national trends in that renters pay a much higher share of income for housing expenses. Renters spend approximately 42% of their income on housing compared to approximately 15% for those who own their home.

Data Sources and Context

The data source for this indicator is the Maine Development Foundation's Annual Survey of Maine Citizens (1998). Respondents to a statewide telephone interview were asked the following questions: (1) What is your current mortgage payment each month for your home, not including taxes or insurance? and (2) How much is your monthly rent, not including heat and electricity? The methodology used to get the data presented above was the following:

First, MDF broke income into 5 categories. The amount per month is based on the lower end of the bracket:

a. Under $15K - $375/month
b. $15-24K - $600/month
c. $25-34K - $625/month
d. $35 - 49 K - $ 875/month
e. $50 K plus - $1250/month

Second, from these numbers, the total number of people within each income bracket paying above that were then added. This total was divided by the total number of respondents in each income group, giving a percentage of people in Maine in 1998 paying more than 30% of their income in rent (or in mortgage). The final data presented are not absolute, due to the range of income within given brackets.