Housing and Neighborhoods
People's housing and living arrangements can affect their financial lives, access to desired amenities
and resources, and overall happiness. Nearly three-quarters of adults are currently satisfied with their housing, and a similar share are satisfied with their neighborhood. However, satisfaction with either is notably lower in low-income communities. Renters, in particular, are less likely to be satisfied with their housing quality than homeowners, and some report difficulties with their landlords.
The decision of who to live with often relates to an individual's network of support. Fifteen percent of adults are living alone, and half are living in a household solely with their spouse or partner and/or children under age 18 (referred to as a nuclear family). The remaining one-third of adults have living arrangements with other people that extended beyond the traditional concept of a nuclear family. Twelve percent of adults live with their parents, 10 percent live with an adult child not in school, 7 percent live with extended family members, and 5 percent live with roommates (table 17).
Table 17. People living in household
|Spouse or partner
|Children under age 18
|Adult children (all in school full time)
|Adult children (at least one not a full-time student or unknown)
Note: Respondents (other than those who live alone) can select multiple answers.
For young adults, the transition from living with their parents to living independently often depends on economic circumstances. The majority of adults under age 25 still live with their parents, but that fraction falls to one-quarter in their late 20s and about 1 in 10 in their 30s (table 18). Black and Hispanic young adults (under age 30) are nearly twice as likely to live with their parents than white young adults. Adults in their late 20s who no longer live with their parents are much more likely to say that they are doing okay financially (76 percent) than those still living with their parents (54 percent).
Table 18. Reasons for living with parents (by age)
|To save money
|To provide financial assistance
|To care for family member
|To receive help with child care
|Prefer living with others
|Percent living with parents
Note: Reasons are among adults who live with their parents. Respondents can select multiple reasons for living with others.
A substantial majority of young adults living with their parents say that saving money is a reason for the living arrangement. As people age, however, the financial relationship flips for some families. Thirty–six percent of young adults living with their parents in their late 20s provide financial assistance to their family. Of adults in their 30s who live with their parents, half choose this living arrangement at least in part to care for family members or friends.
The decision of whether to own or rent one's housing is another fundamental choice. Homeownership varies widely across the population (table 19). In 2018, 64 percent of adults own a home, 27 percent rent, and 9 percent have some other arrangement. Homeownership increases steadily with age, from nearly 3 in 10 young adults (ages 18 to 29) to 8 in 10 older adults (age 60 and older). In fact, the majority of adults over age 30 are homeowners. Young adults are the most likely to have other housing arrangements than owning or renting. Those with incomes under $40,000 are less than half as likely to be homeowners as those with incomes greater than $100,000.
Table 19. Housing tenure (by age and family income)
|Neither own nor rent
|Less than $40,000
|Greater than $100,000
Rental Affordability, Rental Repairs, and Eviction
Rental affordability is an issue for many. This is especially true for those with lower incomes, who are also more likely to rent than own their home. The median monthly rent is between $750 and $999, and among low-income renters whose income is below $40,000 per year, the median monthly rent is between $500 and $749. Over 7 in 10 low-income renters spend more than 30 percent of their monthly income on rent, which is a commonly used benchmark for measuring the financial burden of housing.16 Among renters with incomes between $40,000 and $100,000, about one-quarter are rent burdened.
One way to assess the quality of rental housing is whether the landlord makes repairs promptly.17 Over half of renters experienced a problem with their rental unit, such as a leak or a broken appliance, during the year prior, and one-fourth experienced at least a little difficulty working with their landlord to get the repair done. Fifteen percent of all renters (or 33 percent of those who requested a repair) experienced moderate or substantial difficulty.
Among renters requesting a repair from their landlord, white renters are more likely to say that those repairs were completed without any difficulty. One-quarter of white renters (or half who requested a repair) had no problems getting it completed, compared to 17 percent of black renters and 14 percent of Hispanic renters. The extra burden on black and Hispanic renters shows up in the full range of difficulties to get repairs done (figure 16).
Eviction is a less common, but more acute, sign of strain among renters and among those who previously rented but now rely on others for housing. Three percent of non-homeowners were evicted or moved because of the threat of eviction in the prior two years—which represents 10 percent of all non-homeowners who moved from another rental unit over this time. These evictions contributed to slightly more moves in urban areas (11 percent) than in rural areas (9 percent). Overall, the frequency of eviction remains unchanged from 2017 to 2018.
Satisfaction with Neighborhoods and Housing
The quality of people's neighborhood, as well as the quality of their housing, is an important marker of both their current finances and their opportunities for the future. The neighborhood affects the quality of a child's school, personal safety, and the availability of important amenities like healthy, affordable food.
Overall, 76 percent of adults are either somewhat or very satisfied with the quality of their neighborhood, and a similarly high share are satisfied with the quality of their home or apartment. Most are also satisfied with specific aspects of their neighborhood—including local schools, safety, and other amenities (figure 17).
There are relatively small differences in how satisfied people are with their neighborhoods and with their housing in different parts of the country. People's satisfaction with their housing does not appear to vary much between more expensive and less expensive cities (see box 4). Additionally, people are about as satisfied with their neighborhoods in urban areas (76 percent) as in rural areas (73 percent).
There are big differences, however, in people's satisfaction with their housing across neighborhoods. Adults living in low- and moderate-income neighborhoods are much less likely to be satisfied with their neighborhood (61 percent) than those in middle- and upper-income communities (81 percent).18 Satisfaction with specific amenities, such as neighborhood safety and the quality of local schools, also varies with neighborhood income (figure 18).
Neighborhood satisfaction is also lower among blacks and Hispanics than among whites, though this is also associated with differences in their own incomes and in the average income of their neighborhood. Eight in 10 whites are satisfied with their neighborhood, compared to two-thirds of blacks and Hispanics. The racial gaps in neighborhood satisfaction extend to specific amenities, including local schools and safety (figure 19).
In evaluating the desirability of neighborhoods, people focus on different amenities that are most important to their lifestyle. The importance of some specific amenities varies by age.
People of all ages think that it is at least moderately important to have a grocery store in their neighborhood and to have shops or restaurants nearby. However, while a local bank or credit union is important to those of all ages, it is less important to younger age cohorts than it is to those over age 60. Similarly, older age groups consider it more important to have a church or place of worship nearby. Conversely, younger adults—and especially those ages 30 to 44—place a higher premium on local parks and playgrounds than do older individuals (table 20).
Table 20. Neighborhood amenities that are moderately or very important (by age)
|Shops or restaurants
|Bank or credit union
|Place of worship
|Park or playground
The importance of neighborhood amenities also differs across urban and rural environments. Rural residents place a greater importance on a local church or place of worship than urban residents, but are less likely than urban residents to cite each of the other amenities considered as important to their location decision (figure 20).
Box 4. Housing Satisfaction in Expensive Cities
Who can find affordable housing in expensive cities like Washington, New York, or Los Angeles? Some researchers have begun to connect rising rents in these more expensive, "superstar cities" with the decreasing rates of mobility across metropolitan areas. Less geographic mobility can lead to persistent economic differences across the country and limit economic growth.1
Rising rents in more expensive cities force people to trade off the benefits of moving to economic opportunities in prosperous labor markets, on the one hand, against the higher costs of housing when those labor markets are in more expensive cities. This tradeoff may be particularly difficult for people with lower incomes since they tend to spend a higher portion of their income on housing. So it is helpful to understand how satisfied people with lower incomes are with their housing in more expensive and less expensive areas.
Despite higher housing costs, adults with low incomes relative to others in their metro or micropolitan area—low-relative income adults—report being slightly more satisfied with the quality of their housing and neighborhoods in more expensive cities than in less expensive cities (figure A).2 And it does not appear that they are giving up other things to pay for housing. Adults with low-relative incomes in more expensive cities are as likely to say that they are doing at least okay financially as those in less expensive cities.
People appear satisfied with their housing in more expensive cities despite being less likely to own their homes and living in a city with higher rents. People with low-relative incomes are 4 percentage points less likely to own their own homes in expensive cities than in less expensive cities like Detroit, Charlotte, and San Antonio (figure B).3 People, perhaps surprisingly, also are about as satisfied with the cost of their housing in a more expensive city. Again, the lower rate of homeownership does not translate to lower housing satisfaction or economic well-being.
Adults with relatively low income for their city are slightly more satisfied with their housing and neighborhoods in more expensive cities. So it seems that something besides high housing costs restricts people's geographic mobility. And it is important to understand other factors that keep people out of these higher cost cities.
1. Several studies suggest that differences in housing costs have kept people out of economically productive areas. Most of these studies emphasize workers with lower incomes who tend to be less geographically mobile and who typically spend higher fractions of their budgets on housing. Among others, these include Chang Tsai Hsei and Enrico Moretti, "Housing Constraints and Spatial Misallocation," American Economic Journal: Macroeconomics (forthcoming); and Adrien Bilal and Esteban Rossi-Hansberg, "Location as an Asset," NBER Working Paper (2018). Return to text
2. "Cities," as used here, are metropolitan or micropolitan statistical areas (including suburbs) based on the boundaries used by the 2017 American Community Survey (https://www.census.gov/geographies/reference-files/time-series/demo/metro-micro/delineation-files.html), and median rents in the American Community Survey determine whether a city is more expensive or less expensive. Cities with median rents above the national median of $1,012 are classified as expensive. For example, Madison, Wisconsin, is slightly below and Nashville, Tennessee, is slightly above this number. Similarly, adults with low-relative incomes have family incomes below the median family income for SHED respondents who live in their city. Return to text
3. Neil Bhutta, Steven Laufer, and Daniel Ringo also find that homeownership among lower-income households is particularly sensitive to rising house prices in "Are Rising Home Values Restraining Homebuying for Lower-Income Families?" FEDS Notes(Washington: Board of Governors, September 28, 2017), https://www.federalreserve.gov/econres/notes/feds-notes/are-rising-home-values-restraining-home-buying-for-lower-income-families-20170928.htm. Return to textReturn to text
16. Rent-to-income ratios are calculated based on the midpoints of the ranged income and rent responses. Renters who report no income are excluded. Including those who report no income raises the fraction of rent burdened to 76 percent of low-income renters. See Jeff Larrimore and Jenny Schuetz, "Assessing the Severity of Rent Burden on Low-Income Families," FEDS Notes (Washington: Board of Governors, December 22, 2017), https://www.federalreserve.gov/econres/notes/feds-notes/assessing-the-severity-of-rent-burden-on-low-income-families-20171222.htm, for a discussion of rent burdens among low-income families. Return to text
17. Matthew Desmond, Evicted: Poverty and Profit in the American City (New York: Crown, 2016), highlights the challenges of rental housing repairs among low-income renters. Return to text
18. Low- and moderate-income neighborhoods are census tracts with median family income less than 80 percent of the national median income. Middle- and upper-income neighborhoods are those with family median income above the threshold. Neighborhood designations are calculated with the five-year averages from the 2012–16 American Community Survey. An alternate definition of low- and moderate-income neighborhoods based on average incomes relative to the surrounding area, rather than relative to national averages, produces similar results. Return to text