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Press Release

The financial state of households has improved, but challenges persist: Cleveland Fed’s Forefront

The financial state of households nationwide and regionally improved mildly in 2015 compared to that of recent years, but low- and moderate-income families shared in less of that improvement than others, according to local experts and the Federal Reserve Board of Governors’ recent Report on the Economic Well-Being of US Households in 2015

Locally, mortgage delinquencies are down generally, as are foreclosure rates, and a few metropolitan statistical areas (MSAs) are enjoying increased home values, Cleveland Fed community development research analyst Brett Barkley says, citing the Bank’s Community Stabilization Index. The index provides a relative measure of housing market conditions in MSAs throughout the Cleveland Fed’s region of Ohio, western Pennsylvania, the northern panhandle of West Virginia, and eastern Kentucky.

At the same time, says Barkley, “The American Community Survey showed that roughly 50 percent to 70 percent of low-income renters are housing-cost burdened compared to around 10 percent of non-low-income renters.” (Being housing-cost burdened is defined as spending more than 30 percent of one’s income on rent and housing costs, including utilities.) Barkley notes, too, that more than 30 percent of low- and moderate-income households in the Cleveland Fed’s region have had one or more collections actions in the past two years, double the 15 percent of middle- and upper-income households that did.

Regionally, the reasons for continued financial struggles include stagnant wages and underemployment. Even in the face of continued decline in the unemployment rate, jobs has been the number one issue for several years running, as identified by community leaders polled by the Cleveland Fed’s Issues and Insights survey. “The main reason people cite jobs is that people are finding work but without very good benefits, or it’s part-time and they are needing to work multiple jobs,” Barkley says.

An emerging challenge for households regionally is an inability to pay property taxes, say Barkley and Lou Tisler, executive director of Neighborhood Housing Services of Greater Cleveland. Tisler says property tax foreclosures are nearing the level of mortgage foreclosures.

Among the suggestions Barkley and Tisler cite to improve the state of households are increased transit funding to connect low-income residents with employment opportunities and increasing households’ access to affordable capital.

Read more about the State of Households in Forefront, the Federal Reserve Bank of Cleveland’s showcase of policy ideas.

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell,, 513.455.4479