In the early stages of the recession, Florida ranked third among the 50 states in the percent of homeowners with mortgages who spend 30% or more of their household income on selected monthly ownership costs (mortgage, taxes, and insurance).1 Historically, a 30% cost of ownership has been viewed as the appropriate cost burden. However, in 2008, 49.1% of all home mortgage owners in Florida spent 30% or more of their income on selected ownership cost.2
Interestingly, Florida ranked fourth among states in the number of foreclosures.3 There appears to be a relationship between the percent of population that spends 30% or more of their income on housing costs and the percent of homes that are in foreclosure. Indeed, when housing data from the 50 states are plotted, the national trend is indicative of this relationship as shown in the chart below.
3Foreclosure is defined as all documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank).