How big is the household housing burden? Evidence from the ECB Consumer Expectations Survey

In recent quarters, euro area households have faced higher housing costs, and in particular rising rent or mortgage payments. The ECB Consumer Expectations Survey shows that housing cost dynamics vary across households depending on the type of ownership, with the highest cost increases being borne by those who do not own their home outright (mortgage and renter households). Since 2022 rising housing costs have, on average, largely been offset by growth in household income, leading to stable housing cost to household income ratios. The housing cost burden has, however, increased slightly for both renter and mortgage households at the upper end of the income distribution. Furthermore, at the lower end of the income distribution, a substantial proportion of households have been overburdened by their housing costs. Finally, there is a positive correlation between higher housing costs for households and late payment of rent or mortgages and of utilities. While the figures for late payment have, to date, remained relatively stable, an increasing number of households, especially those in lower income brackets, have indicated in recent months that they expect to fall behind with payments. JEL Classification: E31, E52