A new report from Harvard University’s Joint Center for Housing Studies indicates that nearly half of renters in the U.S. are struggling to afford their monthly payments. As reported by CNNMoney, experts generally recommend that housing costs should represent no more than thirty percent of monthly income. But the number of cost burdened tenants – those who spend more than thirty percent of their income on rent – rose to twenty one point three million people last year.
Of those, more than twenty six percent are severely cost burdened, meaning that they spend more than half of their income to cover rent. Here’s the issue – rents have been rising much more quickly than wages. Between two thousand and one and two thousand and fourteen, rents rose seven percent in inflation adjusted terms while household incomes fell by nine percent.
At the same time, the rising demand for rental units has pushed the nation’s apartment vacancy rate to a thirty year low, which implies that prices will continue to edge higher. The median rent for a new apartment climbed to thirteen hundred and seventy two dollars last year, which represents a twenty six percent increase from twenty twelve. Research also indicates that rising rents are causing people to spend less on food and healthcare.
