First-Time Homebuyer Watch: 1st Quarter 2022

 Homeownership rate of householders aged 30 to 34, first quarter 2022: 49.0%

Homeownership rates in the first quarter of 2022 were little changed from rates in 2021 and below the levels recorded in 2020—when the coronavirus pandemic greatly reduced the response rate to the Census Bureau's Housing Vacancy Survey and consequently distorted homeownership trends.  

The overall homeownership rate in the first quarter of 2022 was 65.4 percent, nearly identical to the 65.5 percent annual rate of 2021. The nation's homeownership rate peaked at 69.0 percent in 2004.

The homeownership rate of 30-to-34-year-olds (the age group in which householders typically buy their first home) climbed to 49.0 percent in the first quarter of 2022. This is a bit higher than the age group's 2021 annual rate of 48.4. More significantly, it is the highest quarterly rate for the age group since 2011—if the pandemic distorted rates of 2020 are excluded. Until 2011, the age group's homeownership rate had never sunk below 50 percent in the data series that began in 1982. Will the homeownership rate of the age group finally surpass 50 percent in the months to come? Stay tuned.

Source: Census Bureau, Housing Vacancy Survey

First-Time Homebuyer Watch: 4th Quarter 2021

Homeownership rate of householders aged 30 to 34, fourth quarter 2021: 48.6%

Homeownership rates in the final quarter of 2021 were little changed from rates in the previous three quarters and well below the levels recorded in 2020—when the coronavirus pandemic greatly reduced the response rate to the Census Bureau's Housing Vacancy Survey and consequently distorted homeownership trends.  

The overall homeownership rate in the fourth quarter of 2021 was 65.5 percent, nearly identical to the rate in the second and third quarters of 2021. The nation's homeownership rate peaked at 69.0 percent in 2004.

The homeownership rate of 30-to-34-year-olds (the age group in which householders typically buy their first home) continued to bobble well below the 50 percent level (the rate was 48.2, 48.0, 48.9, and 48.6 in each of the four quarters of 2021). Except for the 50.1 percent blip in the third quarter of 2020, the homeownership rate of 30-to-34-year-olds has been below 50 percent in every quarter since 2011—the aftermath of the Great Recession. Until 2011, the age group's homeownership rate had never sunk below 50 percent in the data series that began in 1982. 

A sneak peak at the annual homeownership rate for 2021 (the official numbers will be released in March) shows a decline in homeownership in every age group between 2020 and 2021. But the 2020 rates were artificially inflated by the pandemic. Comparing 2021 annual rates to those of 2019 reveals an uptick in most age groups.

Source: Census Bureau, Housing Vacancy Survey

Big Increase in Number of Householders 55-Plus

Between 2000 and 2021, the number of households headed by older Americans (people aged 55 or older) grew by an enormous 65 percent, according to the Census Bureau. This was more than double the 24 percent rise in total households during those years. In contrast, the number of households headed by the middle-aged (people aged 35 to 54) fell 3 percent, largely due to the small Generation X filling the age group. The number of households headed by young adults (people under age 35) increased 9 percent during those years.

Number of households by age of householder, 2021 and 2000 (numbers in 000s)

	2021	2000	% change
Total households	129,931	104,705	24.1%
Young adults (under 35)	26,139	24,487	9.5%
Middle aged (35-54	43,769	44,882	-3.2%
Older (55-plus)	60,024	35,336	65.1%

Today, older Americans head nearly half (46 percent) of the nation's households, up from about one-third of households (34 percent) in 2000. 

Percent distribution of households by age of householder, 2021 and 2000

	2021	2000	pp change
Total households	100.0%	100.0%	—
Young adults (under 35)	20.1	23.4	-3.3
Middle-aged (35-54)	33.7	42.9	-9.2
Older (55-plus)	46.2	33.7	12.5

Source: Demo Memo analysis of the Census Bureau's Historical Households Tables 

Fewest Nuclear Families since 1959

Among the nation's 130 million households in 2021, only 23.1 million were married couples with children under age 18. Not since 1959 have there been fewer nuclear families in the United States. In that year, the 22.9 million married couples with children under age 18 accounted for 45 percent of all households. Now nuclear families account for just 18 percent of households—the smallest share on record.

Percent of households headed by married couples with children under age 18 

2021: 17.8%

2020: 18.4%

2010: 20.9%

2000: 24.1%

1990: 26.3%

1980: 30.9%

1970: 40.3%

1960: 44.2%

1959: 44.5%

Counting both married couples and single parents, 26 percent of the nation's households include children under age 18. This, too, is the lowest share on record and down from 49 percent in 1959. What accounts for the steep decline in households with children? Some of the reasons are delayed marriage and childbearing as well as a growing preference among younger adults for having no children at all. According to a 2021 Pew Research Center survey, a substantial 44 percent of non-parents aged 18 to 49 think it is not too/not at all likely they will have children someday, up from 37 percent who felt this way in 2018. 

Source: Demo Memo analysis of the Census Bureau's Families and Households Data Tables

First-Time Homebuyer Watch: 3rd Quarter 2021

Homeownership rate of householders aged 30 to 34, third quarter 2021: 48.9%

Homeownership rates in the third quarter of 2021 are little changed from rates in the previous two quarters  and well below the levels recorded in 2020—when the coronavirus pandemic greatly reduced the response rate to the Census Bureau's Housing Vacancy Survey and consequently distorted homeownership trends.  

The overall homeownership rate in the third quarter of 2021 was 65.4 percent, identical to the rate in the second quarter of 2021. The nation's homeownership rate peaked at 69.0 percent in 2004.

The homeownership rate of 30-to-34-year-olds (the age group in which householders typically buy their first home) was a bit higher than the rate in the first two quarters of 2021 and could be a sign of increased homebuying in the age group. Except for the 50.1 percent blip in the third quarter of 2020, the homeownership rate of 30-to-34-year-olds has been below 50 percent in every quarter since the second quarter of 2011—the aftermath of the Great Recession. Until 2011, the age group's homeownership rate had never sunk below 50 percent in the data series that began in 1982. 

Homeownership rate of householders aged 30 to 34 for selected years, 1982 to 2020 and by quarter in 2021

2021: 48.9% (third quarter)

2021: 48.0% (second quarter)

2021: 48.2% (first quarter)

2020: 49.1% (pandemic bump)

2019: 48.0%

2016: 45.4% (low point)

2015: 45.9%

2011: 49.8% (first time below 50 percent)

2010: 51.6%

2004: 57.4% (high point)

2000: 54.6%

1990: 51.8%

1982: 57.1% 

Source: Census Bureau, Housing Vacancy Survey

Richest 20% of Households Control 52% of Household Income

One way to examine incomes in the United States is to divide up the nation's 130 million households into five groups (or quintiles) of equal size based on their annual household income. The Census Bureau does this each year using data from the Current Population Survey. The Census Bureau also tracks the lower income limit of the top 5 percent of households. Here are the results for 2020...

Income bracket of each quintile of households, 2020

Bottom quintile:   $27,026 or less

Second quintile:  $27,027 to $52,179

Third quintile:      $52,180 to $85,076

Fourth quintile:    $85,077 to $141,110

Highest quintile:  $141,111 or more

Top 5 percent:     $273,739 or more

Over the decades, the share of aggregate household income accruing to each of the lower four quintiles has fallen, while the share accruing to the highest quintile has grown. Take a look...

Share of aggregate household income accruing to each quintile in 2020 (and 2000)

Bottom quintile:     3.0% (3.6%)

Second quintile:    8.1% (8.9%)

Third quintile:      14.0% (14.8%)

Fourth quintile:    22.6% (23.0%)

Highest quintile:  52.2% (49.8%)

The richest one-fifth of households controlled 52 percent of all household income in the United States in 2020. Fifty years ago in 1970, the richest one-fifth of households controlled a smaller 43 percent of total household income. The highest quintile surpassed the 50 percent threshold for the first time in 2001 and has consistently controlled the majority since 2008.

Source: Demo Memo analysis of the Census Bureau's Historical Income Tables: Income Inequality

Median Household Income in 2020: $67,521

One of the most closely watched economic statistics was released yesterday by the Census Bureau. According to the 2021 Current Population Survey (CPS) fielded in March 2021 (which asks about income in the previous year), median household income in 2020 was $67,521. This is 2.9 percent below the record high median of $69,560 in 2019, after adjusting for inflation. Here is the trend in median household income over the years...

Median household income for selected years (in 2020 dollars)

2020: $67,521

2019: $69,560 (record high)

2018: $65,127

2012: $57,623 (post Great Recession low)

2010: $58,627

2000: $63,292

1999: $63,423 (previous record high)

But there's a problem with both the 2020 and 2021 medians. Remember the low response rate to the 2020 Current Population Survey, fielded in March 2020, as everything shut down because of the coronavirus pandemic? The response rate was just 73 percent—a good 10 percentage points lower than normal. Even worse, higher-income households were more likely than lower-income households to respond to the survey. No wonder median household income in 2019 leaped up by 6.8 percent—a bigger one-year increase than ever before in CPS history dating back to 1967. The Census Bureau published a working paper about the problem (Coronavirus Infects Surveys, Too: Nonresponse Bias during the Pandemic in the CPS ASEC). In the paper, bureau analysts Jonathan Rothbaum and Adam Bee adjusted the 2019 median for nonresponse bias. After the adjustment, they estimated median household income in 2019 to be a smaller $66,790—but still the highest ever recorded by the CPS.

What about the median income number released yesterday? Unfortunately, the March 2021 CPS has the same problems, according to an analysis by Rothbaum and Charles Hokayem (How Did the Pandemic Affect Survey Response: Using Administrative Data to Evaluate Nonresponse in the 2021 Current Population Survey Annual Social and Economic Supplement). While the survey response rate rose to 76 percent, it was still well below normal. Not only that, but "nonresponse bias in 2021 looks more like it did in 2020 than in prepandemic years," Rothbaum and Hokayem report. Consequently, they estimate the 2021 median to be about 2 percent lower than the $67,521 shown above. The good news is that even after the adjustment median household income in 2021 is about the same as the adjusted 2019 median—in other words, surprisingly close to a record high.

Source: Demo Memo analysis of Income, Poverty and Health Insurance Coverage in the United States: 2020

Wild Swings in Spending in 2020

The average household spent $61,334 in 2020. This was 3.9 percent less than the $63,792 record high spending by the average household in 2019, after adjusting for inflation. The decline in spending during the pandemic comes as no surprise, of course. The wild swings in spending on so many categories of products and services are also not surprising—but they still are eye popping. Take a look...

% change in average household spending on selected categories, 2019–2020 (in 2020 dollars)

-67%: public transportation (airline fares, bus, subway, etc.)

-52%: fees and admissions to entertainment events

-33%: food away from home (restaurants)

-26%: gasoline

-25%: apparel

-19%: personal care products and services

-18%: alcoholic beverages

-13%: education

  +5%: food at home (groceries)

+13%: cash contributions (church, charitable, political)

+22%: reading material (newspapers, magazines, books)

The increase in spending on reading material was the largest among the 14 major components of spending tracked by the Consumer Expenditure Survey, according to the Bureau of Labor Statistics. Every age group spent more on reading material in 2020 than in 2019, after adjusting for inflation. The biggest spenders on reading material continue to be the oldest Americans. Householders aged 75 or older spent $196 on newspapers, magazines, and books (digital as well as hardcopy) in 2020, up from $161 in 2019. Householders under age 25 spend the least on reading material—just $51 in 2020. But this was 10 percent more than they spent in 2019.

Source: Demo Memo analysis of the Bureau of Labor Statistics' 2020 Consumer Expenditure Survey

First-Time Homebuyer Watch: 2nd Quarter 2021

Homeownership rate of householders aged 30 to 34, second quarter 2021: 48.0%

Homeownership rates in the second quarter of 2021 are little changed from the first quarter rates and well below the levels recorded in 2020—when the coronavirus pandemic greatly reduced the response rate to the Census Bureau's Housing Vacancy Survey and consequently distorted homeownership trends.  

The overall homeownership rate in the second quarter of 2021 was 65.4 percent, not significantly different from the 65.6 percent in the first quarter of 2021. The nation's homeownership rate peaked at 69.0 percent in 2004.

The homeownership rate of 30-to-34-year-olds (the age group in which householders typically buy their first home) was not significantly different from the 48.2 percent recorded in the first quarter of the year.  Except for the 50.1 percent blip in the third quarter of 2020, the homeownership rate of 30-to-34-year-olds has been below 50 percent in every quarter since the second quarter of 2011—the aftermath of the Great Recession. Until 2011, the age group's homeownership rate had never sunk below 50 percent in the data series that began in 1982. 

Homeownership rate of householders aged 30 to 34 for selected years, 1982 to 2020 and by quarter in 2021

2021: 48.0% (second quarter)

2021: 48.2% (first quarter)

2020: 49.1% (pandemic bump)

2019: 48.0%

2016: 45.4% (low point)

2015: 45.9%

2011: 49.8% (first time below 50 percent)

2010: 51.6%

2004: 57.4% (high point)

2000: 54.6%

1990: 51.8%

1982: 57.1% 

Source: Census Bureau, Housing Vacancy Survey

First-Time Homebuyer Watch: 1st Quarter 2021

Homeownership rate of householders aged 30 to 34, first quarter 2021: 48.2%

Homeownership rates in the first quarter of 2021 continue to fall from the stratospheric heights reached in 2020—when the coronavirus pandemic greatly reduced the response rate to the Census Bureau's Housing Vacancy Survey (HVS) and consequently distorted homeownership trends. The ongoing downward shift means that householders aged 30 to 34 are still falling short of the honorary First-Time Homebuyer title.   

The overall homeownership rate in the first quarter of 2021 was 65.6 percent, not significantly different from the 65.8 percent in the fourth quarter of 2020. The homeownership rate of 30-to-34-year-olds (the age group in which householders typically buy their first home) fell by a full percentage point between the fourth quarter of 2020 and the first quarter of 2021. Except for the 50.1 percent blip in the third quarter of 2020, the homeownership rate of 30-to-34-year-olds has been below 50 percent in every quarter since the second quarter of 2011—the aftermath of the Great Recession. Until 2011, the age group's homeownership rate had never been below 50 percent in the data series that goes back to 1982. 

Yes, it may be a seller's market in the housing industry right now, but the demand for housing is not translating into noticeably higher homeownership rates in any age group. The seller's market is a consequence of the pandemic-related shortage of houses for sale.

Source: Census Bureau, Housing Vacancy Survey

First-Time Homebuyer Watch: 4th Quarter 2020

Homeownership rate of householders aged 30 to 34, fourth quarter 2020: 49.2%

Homeownership rates in the 4th quarter of 2020 have fallen from the stratospheric heights reached in the 2nd and 3rd quarters of 2020—when the coronavirus pandemic greatly reduced the response rate to the Census Bureau's Housing Vacancy Survey (HVS) and consequently distorted homeownership trends. The 79 percent response rate in the 4th quarter was still below the 83 percent average, reports the Census Bureau. But it was well above the 2nd and 3rd quarter response rates of 70 and 71 percent, respectively. 

It will take time before there is certainty that the HVS homeownership statistics once again reflect reality. But the 4th quarter numbers appear to be closing in on reality. The overall homeownership rate in the 4th quarter of 2020 was 65.8 percent, 0.7 percentage points higher than the 65.1 percent homeownership rate in the 4th quarter of 2019. The homeownership rate of 30-to-34-year-olds (the age group in which householders typically buy their first home) has been surprisingly stable over the four quarters of 2020 (48.0, 49.1, 50.1, and 49.2). Note that the 50.1 percent homeownership rate of 30-to-34-year-olds in the 3rd quarter of 2020 was the first time since 2011 that their rate has exceeded 50 percent. Will the age group firmly reclaim its position as the nation's first-time homebuyers in 2021? We'll have to wait and see. 

Source: Census Bureau, Housing Vacancy Survey

Predictions about the Housing Market

The housing market is in a frenzy because of the coronavirus pandemic. The housing inventory is at a record low of 380,000—48 percent below what it was one year ago, according to Calculated Risk. Because of the scarce supply, housing prices are going through the roof—13 percent higher in December 2020 than one year earlier, according to Realtor.com. 

Don't expect this much exuberance in the housing market in the years and decades to come. According to a research report by Laurie Goodman and Jun Zhu of the Urban Institute, household formation will be relatively slow and homeownership will decline over the next two decades. In the report, Goodman and Zhu project household formation and homeownership through 2040 by age, race, and Hispanic origin. Here are some of their findings...

• Household formation will continue at a modest pace. Between 1990 and 2010, the nation gained a net of 12.4 million households in each decade. The number dropped to just 7.3 million between 2010 and 2020. While household formation in the decade ahead will exceed this slow pace, it will fall far below the heady days of the 1990s and 2000s. The projections show the formation of 8.5 million new households during the 2020s followed by an additional 7.6 million in the 2030s. The number of renter households will grow twice as fast as the number of owner households.
• Homeownership will decline for nearly all age, race, and Hispanic origin groups through 2040. The study projects a decline in the overall homeownership rate from 64 percent in 2018 to 62 percent in 2040. Those likely to be hit the hardest are Black households headed by 45-to-74-year-olds. "If current policies stay the same, the Black homeownership rate will fall well below the rate of previous generations at the same age and result in an unprecedented number of Black renters over 65," say Goodman and Zhu. 
• Between 2020 and 2040, all net new homeowners will be nonwhite. The number of Hispanic homeowners is projected to increase by 4.8 million, Asian by 2.7 million, and Black by 1.2 million. The number of non-Hispanic white homeowners will decline by 1.8 million during those years. 

Source: Urban Institute, The Future of Headship and Homeownership

Record Low Household Growth in 2010s

The number of households in the United States grew by only 9.3 percent over the past 10 years—from 118 million in 2010 to 128 million in 2020. This is the slowest household growth on record, capped off by the first ever annual decline in households between 2019 and 2020. 

Number of households, 2010 and 2020 (in 000s)

	2020	2010	percent change
Total households	128,451	117,538	9.3%
With children under 18	33,464	35,218	-5.0

The number of households with children under age 18 fell by nearly 1.8 million during the decade. Behind the decline is the ongoing baby-bust, which is predicted to deepen as coronavirus further reduces births. 

Source: Census Bureau, Families & Living Arrangements

Fewer Households in 2020

The number of households in the United States fell in 2020 for the first time in the history of the Census Bureau's Current Population Survey household series dating back to 1960. The decline was small—a loss of just 128,000 households between March 2019 and March 2020—but even a small decline is significant. It marks the turmoil of the early stages of the coronavirus pandemic, when many left their homes to join family and friends for what seemed at the time to be a short-lived disruption.

Usually, the number of households in the U.S. grows by more than 1 million a year. That has been the case in 41 of the past 70 years. The largest single-year gain was in 1980, when the number of households surged by 3.4 million. The smallest increase was in 2009—up by just 357,000 in the aftermath of the Great Recession. 

Households did not decline in every demographic segment, of course. Here are the segments with the biggest losses...

Householders under age 30: The number of households headed by people under age 30 fell by more than 1.2 million between 2019 and 2020—an 8 percent decline. Some of the shrinkage can be accounted for by college students living off campus who returned to their parents' home when college classes went online. (Students living in college-owned housing are already counted as living with their parents.) 

Single-person households: The number of people who live alone fell by 281,000 between March 2019 and March 2020. Almost the entire decline occurred among men who live alone, their number falling by 273,000 versus an 8,000 decline for women. Why the difference? Most women who live alone are aged 55 or older. Most men who live alone are under age 55. Because of the age difference, women who live alone are less likely to be college students and less likely than their male counterparts to be hurt by the Covid-19 Recession. 

Asian, Black, and Hispanic households: The number of households headed by Asians, Blacks, and Hispanics fell by a combined 332,000 between March 2019 and March 2020. Asian households saw the largest drop, with 128,000 fewer households in 2020—a 1.8 percent decline. The number of Black households fell by 113,000 and Hispanic households by 91,000. 

Source: Census Bureau, Historical Household Tables

What Americans Owe

American households owed a median of $64,800 in 2019, according to the Federal Reserve's Survey of Consumer Finances. This means half of households owe more than this amount and half owe less. Here are the details of debt in 2019...

	% of households  with debt	median amount                       owed
Any debt	76.6%	$64,800
Credit card balance	45.4%	$2,700
Primary residence	42.1%	$134,800
Vehicle loans	36.9%	$13,100
Education loans	21.5%	$22,300
Other installment loans	10.5%	$3,800
Other loans secured by residential property	4.7%	$122,000

The most common type of debt is credit card, with 45 percent of households having a credit card balance after their last payment. The majority of households use credit cards only for convenience, the Federal Reserve reports, paying the balance in full each month. 

Sixty-five percent of households owned their primary residence in 2019. With 42 percent of households having debt secured by their primary residence, this means about one-third of households own their home free and clear.

Source: Federal Reserve Board, Changes in U.S. Family Finances from 2016 to 2019: Evidence from the Survey of Consumer Finances

What Americans Own

Almost all American households own something of value. Fully 99.6 percent of households owned one or more of the assets measured by the Federal Reserve Board's 2019 Survey of Consumer Finances. But only four kinds of assets are owned by most households: transaction accounts (checking and savings accounts), vehicles, a home, and a retirement account. 

Here is the percentage of households owning each type of asset, ranked from most to least common, and the median value of the assets for households that own them:

	percent of households owning	median value         for owners
Any asset	99.6%	$227,600
Checking/savings accounts	98.2%	$5,300
Vehicles	85.4%	$17,200
Primary residence	64.9%	$225,000
Retirement account	50.5%	$65,000
Cash value life insurance	19.0%	$9,000
Stocks (directly owned)	15.2%	$25,000
Business equity	13.4%	$89,100
Other residential property	13.1%	$160,000
Pooled investment (mutual) funds	9.0%	$110,000
Certificates of deposit	7.7%	$25,000
Savings bonds	7.5%	$800
Equity in nonresidential property	6.7%	$72,000
Other managed assets	5.9%	$115,000
Bonds (directly owned)	1.1%	$121,000

Source: Federal Reserve Board, 2019 Survey of Consumer Finances

First-Time Homebuyer Watch: 3rd Quarter 2020

Homeownership rate of householders aged 30 to 34, third quarter 2020: 50.1%

For the first time since 2011, the homeownership rate of householders aged 30 to 34 edged above the 50 percent threshold, allowing them to reclaim their position as the nation's first-time homebuyers. First-time homebuyers are defined as the age group in which the homeownership rate first surpasses 50 percent. Historically, householders aged 30-to-34 were the nation's first-time homebuyers. But in 2011, their homeownership rate fell below 50 percent and has been stuck there ever since. Until now. 

Let's postpone the celebration, however. The coronavirus pandemic has upended the nation's data collection efforts. The Housing Vacancy Survey (HVS), which produces the quarterly homeownership statistics, is no exception. Because of the pandemic, the Census Bureau has been collecting HVS data by telephone rather than in-person interviews, and monthly response rates have dropped. Just 66 percent of households responded in July and 69 percent in August. This compares with a response rate of 83 percent for those months in 2019. When the Census Bureau resumed in-person interviews in September, the response rate increased to 79 percent, a hopeful sign that things will eventually return to normal. 

But not yet. As was true for second quarter 2020 data, third quarter data cannot be taken at face value. As senior research associate Daniel McCue of the Joint Center for Housing Studies explains it: "It appears that we are in for a period of time where trends in housing metrics obtained from the HVS—such as homeownership rates, vacancy rates, and household growth—will be difficult to determine and largely unknown."

Source: Census Bureau, Housing Vacancy Survey

Median Household Net Worth in 2019: $121,800

How wealthy is the average American household? We find out only every three years, which is a very long wait. Well, the wait is over but the moment is bittersweet. 

On the one hand, we now know that net worth climbed by a substantial 17.7 percent between 2016 and 2019, after adjusting for inflation—almost, but not quite, a record-busting increase (outdone only by the 18.4 percent increase between 2004 and 2007). On the other hand, because of Covid, who cares? Reviewing the  2019 numbers is like looking through an old family photo album of a time long ago and far away.

Still, the story must be told...

Median household net worth, 1989 to 2019 (in 2019 dollars)

2019: $121,800

2016: $103,500

2013:   $89,400

2010:   $90,700

2007: $149,400 (record high)

2004: $126,200

2001: $125,300

1998: $112,800

1995:   $96,500

1992:   $88,900

1989:   $93,600

Source: Federal Reserve Board, 2019 Survey of Consumer Finances

Median Household Income in 2019: $68,703

Every year demographers anxiously await the Census Bureau's release of income statistics from the Current Population Survey. This year, not so much. In the midst of the Covid-19 Recession, the treasure trove of data has lost much of its predictive power. But still, wow. Median household income soared to a record high of $68,703 in 2019. The median increased by 6.8 percent between 2018 and 2019, after adjusting for inflation. This is the biggest one-year increase in the history of the series dating back to 1967. 

Or is it? Could the coronavirus pandemic of 2020 have caused the outsized increase in median household income in 2019? It doesn't seem possible, but the answer is yes, according to Census Bureau analysts Jonathan Rothbaum and Adam Bee. Here's why... 

The Census Bureau fields the Annual Social and Economic Supplement to the Current Population Survey in March of each year, with respondents asked to report their income for the previous year. The income statistics for 2019 were collected in March 2020—in the middle of the coronavirus pandemic. Not surprisingly, survey response rates were abnormally low—10 percentage points lower in March 2020 than in the same month of 2019. When Rothbaum and Bee analyzed response rates by demographic characteristic, they discovered that higher-income households were more likely than lower-income households to respond to the CPS during the pandemic. This nonresponse bias inflated the estimate of household income. 

After adjusting for nonresponse bias, median household income in 2019 is an estimated $66,790 rather than the published and official figure of $68,703. The adjustment reduces the 2018–19 increase in median household income to a more modest 3.9 percent rather than 6.8 percent. 

The good news is that median household income in 2019 is still the highest on record, even after the adjustment for nonresponse bias. The 3.9 percent increase in median household income between 2018 and 2019 may not have been the biggest on record, but it was still pretty big—in the 93rd percentile of annual increases. "The adjusted estimates would indicate that 2019 (from the 2020 CPS ASEC) was still a very good year for income," the researchers conclude.

Source: Census Bureau, Coronavirus Infects Surveys, Too: Nonresponse Bias during the Pandemic in the CPS ASEC

Average Household Spending in 2019: $63,036

Average household spending surpassed $63,000 in 2019—but just barely. The $63,036 spent by the average household in 2019 was 1.1 percent greater than spending in 2018, after adjusting for inflation. Spending in 2019 was the highest ever recorded by the Consumer Expenditure Survey and 12 percent above the post-Great Recession low of $56,077 in 2013. 

That's all ancient history now that the coronavirus pandemic has destroyed millions of jobs and plunged the U.S. into a recession. We will have to wait another year before the Bureau of Labor Statistics releases the 2020 Consumer Expenditure Survey data. Only then will be be able to measure the impact of the Covid-19 Recession on household spending. 

Average household spending, 2006 to 2019 (in 2019 dollars)
2019: $63,036 (record high)

2018: $62,332
2017: $62,643
2015: $60,378
2013: $56,077 (post-Great Recession low)
2010: $56,403
2006: $61,374 (pre-Great Recession record high)

Source: Bureau of Labor Statistics, 2019 Consumer Expenditure Survey