On September 13, the U.S. Census Bureau released two new annual reports (Income and Poverty in the United States: 2015 and Health Insurance Coverage in the United States: 2015) that offer the public some unmistakably positive news. According to the reports, the U.S. has experienced the largest decline in poverty rates in the last 16 years, with 13.5 percent of Americans (43.1 million people) living in poverty in 2015, compared to 14.8 percent in 2014. This decline coincides with the nation’s continued decrease in the number of people without health insurance coverage, which decreased from 10.4 percent of the population (33 million people) in 2015 to 9.1 percent in 2014. Additionally, real median household income increased to $56,516 in 2015, constituting a 5.2 percent gain from 2014 – the first annual increase since 2007, right before the most recent recession.
To complement the national-level reports, the Census Bureau also recently published local-level income, poverty, and health insurance statistics from the American Community Survey. According to the new data, between 2014 and 2015, real median household income increased in 39 states plus the District of Columbia and not one state experienced a decrease in real median household income. Additionally, between those same years, poverty rates declined in 23 states (largely for metropolitan areas) and not one state experienced a poverty rate increase.
Journalists and experts have been quick to note the effect of this income growth and poverty decline on our housing market. Dan McCue from the Harvard Joint Center for Housing Studies points out that demand for housing, especially among young adults gaining independence, may grow. The income growth will likely work against the nation’s declining homeownership rates and help alleviate the stresses felt by housing cost-burdened households.
Kriston Capps from The Atlantic points out the number of people in poverty (43.1 million) is still higher than where it was before 2007, and households in the third, second, and lowest quintiles have yet to recover. Real median household income in 2015 was 2.4 percent lower than the peak in 1999, Capp writes, the economy is recovering, but Americans would feel it more profoundly if they weren’t putting all their money toward the rent.