The share of Bay Area households excessively burdened by housing costs has increased since 1980, as home prices and rents have spiked at a faster rate than income growth. In 2015, nearly one in three Bay Area households spent at least 35 percent of its income on housing. Historically, homeowners have been less cost-burdened than renters; this divergence has grown in recent years. Following the Great Recession, the share of excessively burdened homeowners has declined from 33 percent in 2009 to 23 percent in 2015, while the share of excessively burdened renters remained at 40 percent.
Bay Area homeowners have benefited from a number of trends in recent years. The housing bust, combined with high foreclosure rates, allowed many of today’s owners to buy homes in a period of relatively low prices. Low interest rates also reduced the cost of owning for existing and new homeowners at the same time as income growth accelerated for higher-earning households. The result has been improved housing affordability for owners. Renters, many of whom have been priced out of the home-buying market by comparatively lower incomes and tighter lending standards, have seen little relief from rising rents and stagnant wages.