[OC] Housing and Utilities Expenditures in the US

[u/haydendking]

[u/chicapox]

I must being doing something wrong, my rent and bills is WAY more than 20% of my expenditures.

[u/kyleesi666 → u/chicapox]

OP should display median instead of mean

[u/kfinity → u/kyleesi666]

For median you have to go to the ACS sources that BEA aggregates for the PCE.

https://data.census.gov/table/ACSDT5Y2023.B25070

About 1/4 of households pay <20% of their income in rent (ie, OP's average). The same number (1/4) pay more than 50% of their income in rent. The median looks around 30%.

[u/Techygal9 → u/kyleesi666]

I would also like to see it with retirees excluded at the very least.

[u/randynumbergenerator → u/kyleesi666]

Also household level instead of per capita, it's a more relevant stat compositionally.

[u/ACorania → u/chicapox]

You and everyone else. I don't think this is accurate.

Maybe this is pretax money? Still not sure it would get there.

[u/planetaryabundance → u/ACorania]

Yes, my personal anecdotes must be representative of the consumption habits of 270 million American adults!!! The data is incorrect because of my anecdote!!!

[u/ZeOs-x-PUNCAKE → u/planetaryabundance]

The fact that this chart claims the average person in California is only spending $1k in rent per month makes it pretty hard to believe.

I’m in Montana and there’s not a single person I know who pays less than $1k for rent, not including anything else. Sure, that’s anecdotal, but if the data tells me the sky is red and my eyes tell me it’s blue, I’m understandably going to be a bit skeptical of that data.

I’m not saying it’s certainly false, but I don’t quite believe it’s certainly true either.

[u/haydendking → u/ZeOs-x-PUNCAKE]

If you know any children then you know people who pay less than $1k in rent. 22% of the US is under 18, and then there are adults who live with their parents. Also, I paid ~$900 rent in California from 2022-2024 and know multiple people who live there today and pay even less.

[u/ZeOs-x-PUNCAKE → u/haydendking]

Are children included in PCE calculations though? I don’t know for sure but I feel like they aren’t.

Your point of people living with their parents makes sense though, I suppose I didn’t consider that. I guess I only considered people who actually do pay rent.

[u/Hamsters_In_Butts → u/ZeOs-x-PUNCAKE]

OP stated elsewhere that children were included in the denominator of their calculation, so these numbers are useless imo

[u/EmptyNametag → u/Hamsters_In_Butts]

Wow that’s genuinely so fucking stupid.

[u/haydendking → u/Hamsters_In_Butts]

They're definitely useful for seeing state-level differences. If you think per capita isn't a useful metric, you could estimate these numbers without children by multiplying them by 1.28 (children are 22% of the US population).

[u/Hamsters_In_Butts → u/haydendking]

using numbers that resonate with people and accurately represent what they are feeling would be much more useful (and beautiful), and it would also show statewide differences

i don't think i'm off base here considering the numerous replies in this thread echoing the same sentiment

[u/XupcPrime → u/Hamsters_In_Butts]

Op explained to you how to get numbers without kids. You want stats based on what you feel it's right. That's not how it works. The truth is most of the US is doing fine no matter what you read in reddit.

[u/haydendking → u/ZeOs-x-PUNCAKE]

Children are included in PCE but they don't spend much, especially on rent.

[u/haydendking → u/chicapox]

Me too. Mine have been 50-70% the past few years. I think it gets dragged down by rich people and people in rural areas.

[u/napleonblwnaprt → u/haydendking]

I think you're calculating it wrong. There is just no way. Are you perhaps including children in the calculation somehow? How did you calculate it? Or is this literally per capita and not per payer?

[u/haydendking → u/napleonblwnaprt]

Children affect the per capita calculation by increasing the denominator. For the portion of consumption expenditure, it is just total housing and utilities expenditure divided by total expenditures. It isn't finding the portions at the individual level and then averaging across everybody.

[u/mr_ji → u/napleonblwnaprt]

If it was per capita including children that would send it through the roof. They have cost but zero income.

[u/napleonblwnaprt → u/mr_ji]

I was more thinking they divided the total expenditures by total population. Say, a million households all paying $1,000/mo for rent, but an average household is 4 people, meaning average rent is only $250

[u/haydendking → u/napleonblwnaprt]

Yes, this is how it is calculated. I think that households with children would generally have lower per capita expenditures.

[u/Hamsters_In_Butts → u/haydendking]

i don't think that information is valuable, though. children aren't contributing to paying these expenses so it isn't fair to say that they share an equal obligation, and that number varies wildly from household to household.

[u/EmptyNametag → u/chicapox]

Yeah, I was gonna say my rent alone is 45% of my post-tax paycheck, utilities excluded. I don’t know anyone who is hitting that 1/3 benchmark that people suggest, let alone well below it.

[u/Mobius_Peverell → u/chicapox]

There are a lot of Boomers out there who own their houses, and have had their property taxes frozen since the 90s, (I know that California and Pennsylvania both do that; unsure about other states) who are paying functionally $0.

[u/baxter1985]

This makes no sense cuz I’ve lived in a lot of states and I’ve paid more for utilities and housing outside of AZ. Granted, our housing costs are way up of late but still.

[u/EaringaidBandit]

Now do just the renting population. Homeowners pay significantly less and hold on to their homes more now than ever.

[u/jvick3]

CA average is 12.2k per year? Where do you even rent there for under 1k a month? Seems way off.

[u/rootsmarm → u/jvick3]

If “per capita” includes dependents (eg children, stay-at-home parents, etc) it’s not as surprising.

[u/Dixiehusker → u/rootsmarm]

California isn't the only place people have lots of kids.

[u/Dixiehusker → u/jvick3]

No chance that number is right. There's normal 3 bedroom places for rent and sale for 3k a month. The sheer number of places that would need to be available under 1k to bring that average down doesn't exist.

[u/haydendking → u/jvick3]

Units occupied by one person typically cost more per occupant than larger units. Also, not everyone pays rent.

[u/pr0pane_accessories]

Ha, I'm in AZ and it's exactly 20% for me! I probably have the lowest expenses of anyone I know though. Got a mortgage and solar at very low interest rates.

[u/sl0wjim]

Does this not include property taxes?

[u/haydendking → u/sl0wjim]

Property taxes aren't included

[u/IndependentBoof → u/haydendking]

Property taxes aren't included

From what I can find, PCE doesn't include property tax on owner-occupied households, but when property taxes are factored into rental property prices, they can be. Please correct me if there's any inaccuracy in this (preferably with sources).

[u/haydendking → u/IndependentBoof]

Here is the most recent methodology doc I could find: https://www.bea.gov/sites/default/files/papers/WP2017-7.pdf
Property taxes are never included directly, but they do influence what rents landlords charge. Since imputed rents for owner occupied housing are based on rents for similar units, the indirect influence of property tax on rents shows up in both direct and imputed rents.

[u/haydendking]

These numbers include rent payments and imputed rent payments for homeowners as well as utility payments and other housing costs.

Data: https://apps.bea.gov/regional/downloadzip.htm
Tools: R (packages: dplyr, ggplot2, sf, usmap, tools, ggfx, grid, scales)

[u/baxter1985 → u/haydendking]

Correct. One major limitation of BEA analysis is it leaves out home ownership. So places that are cheaper to own than rent are upside down. Historically that was always the case for places like AZ and Nevada.

[u/kc2syk → u/haydendking]

How is rent imputed for homeowners? If mortgage payments and property tax are not included, this may not be useful.

[u/haydendking → u/kc2syk]

It's based on the characteristics of the home. Essentially, it's what the owner would be paying if they were renting that house. Imputed rent ends up reflecting property taxes and capital costs, but only indirectly, through the observed rents of comparable properties.

[u/allophonous-rex]

Cool insights. Despite the distinct color gradient this is still a relatively tight standard deviation of around 2%.

[u/Rough-Yard5642]

California and Texas being about the same 🤯

[u/Consistent_Room_9097 → u/Rough-Yard5642]

Bad data

[u/Rough-Yard5642 → u/Consistent_Room_9097]

Why do you say that? It says it's from the US Bureau of Economic Analysis, which has at least some level of trustworthiness in my eyes. I'm genuinely asking btw - not trolling

[u/IndependentBoof → u/Rough-Yard5642]

My guess is that it includes taxes. Property is as expensive as fuck in most of California, but effective property tax according to this site is 0.7% for CA and 1.36% for TX.

Median Income is about 20k higher per individual in CA.

Mix those factors together and the results make more sense.

Edit according to OP's other comments, property taxes aren't included; however, I believe PCE can indirectly reflect property taxes when those expenditures are passed onto a renter as part of their rent.

[u/LoneSnark → u/IndependentBoof]

What is off is incomes. California has more billionaires pulling average incomes way up, making the high housing and utility costs seem affordable.

[u/mercury1491]

Is taxes a personal consumption expenditure? Because if not, there is no way most people are spending <20% on housing and utility bills.

Likely the median number would be higher than the average on this one, with rich outliers throwing off the average.