2008 Census data: Housing is getting even less affordable

— -- More Americans found housing unaffordable last year, even though home prices across the U.S. have taken a major fall. More than 40 million spent 30% or more of their household income on housing costs, 600,000 more than in 2007, according to 2008 Census data released Monday. That includes homeowners with and without mortgages, as well as renters.

The number of renters increased, while the number of homeowners declined.

A bright spot: The share of homeowners with mortgages spending nearly a third of their income on housing held stable in 2008, after steady increases since 2002.

Nearly two in five homeowners with mortgages and half of renters paid 30% or more of their before-tax income on housing costs, which is the limit the government sets for determining that housing is unaffordable, according to an analysis of Census data done for USA TODAY by the Joint Center for Housing Studies at Harvard University.

Housing costs for homeowners include mortgage payments, taxes, insurance and utilities. Renter costs include rent and utilities, if they are paid separately.

The prices of homes this year are down more than 20% compared with the peak of the housing bubble in 2006, according to the National Association of Realtors.

"Although housing affordability for newly purchased homes has improved, overall affordability for renters or owners is unchanged or worse because of the economy," says Daniel McCue, research analyst at Harvard's Joint Center for Housing Studies. "People are still hurting."

Reflecting the rapid pace of foreclosures, the number of homeowners dropped by about 142,000.

From 2007 to 2008 the homeownership rate fell more than half a percentage point, to 66.6% — the lowest level since 2002, says Mark Mather, a vice president at the Population Reference Bureau in Washington, D.C.

Many of those former homeowners have become renters, a segment feeling the brunt of steep housing costs. About half of renters spend at least 30% of their before-tax pay for housing.