John Edward, a resident of Chelmsford who earned his master’s degree at UMass Lowell and who teaches economics at Bentley University and UMass Lowell, contributes the following column.

A housing bubble burst. Homeowners defaulted on mortgages. Banks foreclosed on homes. Add in a loosely regulated shadow banking system and the result was a financial crisis and the Great Recession.

Many families were already in a crisis before the housing bubble burst. They were overextended. They were deep in debt. They were spending too much.

They were spending too much on housing.

The Bureau of Labor Statistics (BLS) tracks consumer expenditures. They provide detailed data going back to 1984. I have adjusted the numbers for inflation.

Consumers are spending more now, but not by much. Since 1984, average annual expenditures increased by only 4 percent. For the bottom 20 percent of income earners, spending actually decreased by 8 percent.

During the same period, spending on housing increased by 18 percent. The average household spends $16,557 per year on housing (the BLS numbers include both ownership and rental).

For low to middle-income households, paying for a place to live became a budget buster. Housing is now more than twice as large as any other expenditure category.

For many expenditure categories, spending is down since 1984. Spending on food, including restaurants, is down significantly. Spending on clothing has decreased by almost 40 percent. Spending on transportation is down. The same is true for alcoholic beverages and tobacco products. People are spending less on personal care products and services. They are spending a lot less for reading materials.

In addition to housing, there are other categories where families are spending more than they were in 1984. Spending on healthcare increased significantly. National healthcare spending is a potential crisis that we have to deal with. However, whereas housing is one-third of household spending, healthcare is still only 6.5 percent.

Education spending is up a lot. That helps explain why student-loan debt is over a trillion dollars. Again, this is a big problem, but spending on education is only 2.2 percent of the average household budget.

The bottom line – if it were not for the increase in spending on housing, instead of going up by 4 percent, average annual expenditures would have decreased by 2 percent. Another way of looking at this – if housing was more affordable, families could afford to pay more for healthcare or an education.

In her book The Two-Income Trap: Why Middle-Class Parents are Going Broke, Elizabeth Warren (with her daughter Amelia Warren Tyagi as co-author) performed a similar analysis. They dispel the “Over-Consumption Myth.” They focus on married couples with children who own homes and report, “between 1984 and 2001… housing prices shot up 78 percent” (adjusted for inflation).

The result: “Families put Mom to work, used up the family’s economic reserves, and took on crushing debt” that brought them to the “brink of bankruptcy.” The book, published in 2003, documents an affordable housing crisis, but pre-dates the financial crisis that drove families over the brink.

When the housing bubble burst, home prices fell sharply. Yet, we still have an affordable housing crisis.

Low and middle-income families are spending much more on housing than is fiscally prudent. The affordability guideline is that households should spend no more than 30 percent of income on housing. The BLS numbers show low to middle-income earners are spending 42 percent.

The Northern Middlesex Registry of Deeds provides evidence of families going over the brink. Banks have been foreclosing on homes in Greater Lowell at an alarming rate. In the last five years, the number of foreclosures was ten times the rate between 2001 and 2005. The numbers for 2012 show no sign of the crisis being over.

The Registry records an “Order of Notice” when a lender gets permission to initiate a mortgage foreclosure. Orders of Notice are a good indicator of homeowners in distress and are a predictor of future foreclosures. The 2007-2011 numbers reveal extensive distress. The 2012 numbers predict the housing crisis is far from over.

The crisis is even worse for renters. More than one out of three Lowell homeowners are living in unaffordable living conditions according to the latest Census data. For renters in Lowell, almost half are paying more than the 30 percent affordability threshold.

In late August, a Boston Globe article reported “average monthly rent in North Shore and Merrimack Valley communities increased by 8.9 percent” (between 2007 and 2012). Rents are increasing at all price levels.

Why are rentals so expensive? The answer is strong demand and not enough supply.

Former homeowners are on the rebound. Families are downsizing as they face job loss, foreclosure, bankruptcy, and tight credit markets. One side effect of the Great Recession has been an increase in demand for rentals.

In addition, limited supply continues to drive up prices in Massachusetts. In particular, as reported by the Globe, affordable housing for low-income households is in short supply.

Why is the supply of affordable housing so limited? In the Commonwealth, the primary cause is exclusionary zoning.

Another recent Globe headline reported, “Tight supply means rents soaring in city” (and in Greater Boston). In this article, Barry Bluestone from Northeastern University blames minimum lot sizes and restrictions on multi-unit buildings. Towns need to control development. However, too much control and you choke off the supply of affordable housing.

What can we do about the affordable housing crisis? Answering that question will have to wait for a future column where I will zone in on solutions.