How the Middle Class Is Faring on Housing

"While housing affordability has long been a problem for low-income families, middle-income families are increasingly facing affordability challenges, especially in urban areas with strong labor markets," Jenny Schuetz writes. In a lengthy piece for Brookings, Schuetz uses data from the Census Bureau's Individual Public Use Microdata Sample (IPUMS) to examine housing stress on middle-income households. 

Defining "middle-income" as households in the middle three income quintiles for their metro area, Schuetz writes that "where families live has wide-ranging consequences for their well-being. Location affects access to jobs, transportation, and social networks, as well as the quality of local services such as schools and public safety."

While homeownership is not easily accessible to lower-income households across the country, "among middle-income households, substantial homeownership gaps exist by age and race." Of course, homeownership also lags among the middle class in expensive cities. Given that owning a house acts as an effective means of "forced savings," Schuetz recommends that policymakers consider other ways to incentivize wealth-building, including other obligatory savings mechanisms and tax incentives.  

She concludes by noting that in expensive cities with strong labor markets, "any long-term solution must involve increasing housing supply, especially near jobs and transit infrastructure."