Homeowners in America aren’t the only ones struggling with an unaffordable housing market. Renters are also bearing the brunt.
A report from Harvard University’s Joint Center for Housing Studies released last week showed that both homeowners and renters in recent years have become increasingly burdened by climbing housing costs. The report, based on an analysis of existing data, said that nearly one in four households that own a home “are now stretched worryingly thin.” The cost burdens are even worse for renters.
Renters who spend more than half of their household income on housing and utilities rose in 2022 to a new record high of 12.1 million, up 1.5 million from levels seen before the Covid-19 pandemic. Allocating such a high proportion of household income to rent makes them vulnerable to becoming unhoused if they face an unexpected financial issue, such as an unexpected medical bill.
That’s all part of a broader struggle in the US housing market, and recent data shows that it hasn’t gotten any better. A persistent lack of homes available for sale is spurring bidding wars. Elevated mortgage rates are keeping sellers and some buyers on the sidelines.
The Harvard report said that “state and local experimentation with regulatory reforms and incentives will incrementally add affordable homes” and that there’s a pressing “need for down payment support and access to low-interest mortgage products to close racial gaps and put homeownership within reach for households with modest incomes.”
