7.5 million spend at least half their income on housing

MIAMI — Al Ray is so strapped for cash, the only time he eats out is Wednesday or Sunday, when the local McDonald's sells hamburgers for 49 cents.

Ray lost his engineering job last November, and he has been working as a high school tutor, scratching out about $1,000 a month — if he's lucky. He struggled to make his $1,400 monthly mortgage payment and $330 monthly homeowners' association fee until May, when he stopped paying.

Ray, 44, is looking for work and renting out a room in his two-bedroom condo in Davie, Fla., for $500. But his monthly income doesn't match his expenses, and he's facing foreclosure.

"I barely have money to survive," he said.

Ray is one of more than 7.5 million people — almost 15 percent of American homeowners with a mortgage — who are spending at least half their income on housing costs, according to 2007 data released Tuesday by the U.S. Census Bureau. That is up from nearly 7.1 million the year before.

Traditionally, the government and most lenders consider a homeowner spending 30 percent or more of income on housing costs to be financially burdened. But 19 million U.S. homeowners — almost 38 percent of those who have mortgages — now meet that definition.

Home prices have fallen this year. But in the most expensive markets, where home prices tripled during the boom, many working families still cannot afford to buy a home.

The data underscore serious affordability problems in this country and highlight how financial problems — from a lost job to higher gas prices or insurance premiums — can put a family behind on its mortgages and into foreclosure.

An estimated 10 million home-owners owe more on their mortgages than their homes are worth, according to Moody's More than 4 million homeowners were at least one month behind on their loans at the end of June.