Housing prices are exacerbating the gap between the richest and poorest Americans, a new study has found.
Incomes are growing fastest for the wealthiest Americans – especially the top 1%. However, housing costs are growing fastest for families at the bottom of the income scale, according to a study by Apartment List. While those in the bottom 10% of income distribution have seen their housing costs rise the most, those in the top 25% have actually seen housing costs fall.
“By nearly any measure available, income inequality has grown rapidly in the United States since the early 1980s,” said Igor Popov, chief economist at Apartment List. “After a period of broad-based growth in the postwar era, the top of the income distribution began to pull away from the pack. In the past few decades, the top 10% of earners have enjoyed much stronger wage growth than the middle class has. … Meanwhile, the evolution of housing markets is making the gap between the haves and the have-nots even bigger.”
Americans in the bottom 10% of income distribution have seen the most rapid growth in housing costs over the past decade, Popov said.
“Moving up the income ladder, the richer a household gets the less it has seen rents and mortgage payments spike,” he said. “At the top, we find that the top quartile of income earners has actually seen their housing costs fall in the last decade.”
For the poorest Americans, affording even so-called affordable housing can be a challenge, Apartment List found.
“Income inequality is much larger than housing inequality, and this is true at both the top and bottom of the income distribution,” Popov said. “Those in the lowest quartile make only 27% as much as the median household, but they still need to pay 709% of what the median household does each month to housing. America’s poor earn just a fraction of the median family’s income, but their housing costs are not too different.”