The Economics of Housing
Shelter is one of the most basic requirements of human life and housing costs are a major item in most people’s budgets. For those who own their own homes, the value of the house is often the largest item in their inventory of personal wealth. It is also one of the largest items in the cost of living. Whether housing costs are high or low can greatly affect what kind of standard of living individuals and families can afford with what is left over after paying for a place to live.
The old rule of thumb that housing should cost about one-fourth of one’s income has become outdated for 28 million American families, who pay upwards of 30 percent of their incomes for housing. In some places, it ...