Housing costs now unaffordable for record number of US renters

Business

By Breck Dumas, Fox Business

If you find yourself struggling to make your rent payment every month, you’re not alone. More Americans are having that problem than ever before, according to new data from Harvard University.

The number of American renters considered “cost burdened” by their monthly housing payment in the latest count from 2022 hit an all-time high of 22.4 million — amounting to half the tenants in the U.S. — according to a study released Thursday by Harvard’s Joint Center for Housing Studies.

Anyone who spends more than 30% of their income on rent and utilities is determined to be cost burdened, and the study found more than half of those tenants were severely burdened, with 12.1 million shelling out more than 50% of their income on housing costs — another record-high number.

The study noted that the price of rent in the U.S. has outpaced income gains for decades, but the share of cost-burdened renters grew across all income brackets in 2022. The findings showed the median amount of residual income renters had left over after paying their monthly housing costs plummeted to an all-time low of $310.

Renters in 2022 were not only left with less money in their pockets at the end of the month, the purchasing power of those dollars was depleted. Inflation peaked at 9.1% in July 2022, adding further sting to household budgets.

The pain of high rental costs is far from over.

Data from Realtor.com released this week shows the median price of asking rent ticked down a measly 0.4% year-over-year in December to $1,713. That is down 3.5% from its July 2022 peak, but still well above pre-pandemic levels.

The median asking rent price is still 22% higher compared to the same time in 2019, underscoring the significant price pressures renters continue to face.

FOX Business’ Daniella Genovese contributed to this report.