Based on the same metric, more than 12% of all households in cities exceeded this threshold in 2019 compared with less than 7% in rural areas. This aggregate figure masks considerable heterogeneity across households, with 24% of those tenants renting at market price being overburdened, compared with less than 5% in the case of outright owners (mortgage-free owners). In the euro area, around 10% of households were overburdened in 2019 (Chart A). A common indicator of household stretch is the housing cost overburden rate, which is the percentage of the population living in a household where the total housing costs amount to more than 40% of the disposable income. Housing cost burden and overcrowding tend to be distributed unevenly across households. Against this background, this box examines certain data that help to frame the housing cost burden in the euro area and across types of household. This is due to the fact that tenants and less affluent households, for example, tend to spend a large share of their income on housing. Furthermore, housing costs are dependent on structural features, which will be the focus of this box, such as the homeownership rate or certain household characteristics. Changes in these costs are closely linked with housing market developments, such as rental and house prices, as well as mortgage payments. Housing costs typically include the utility costs (water, electricity, gas and heating), maintenance, and rental or mortgage interest payments, altogether accounting for around one-fifth of household income expenditure in 2019. Housing costs represent a significant share of the household budget. Published as part of the ECB Economic Bulletin, Issue 1/2021.
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