Half of US renters are cost-burdened, Harvard report finds
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Rent prices are coming down in some areas, but not at the pace needed to provide relief to tenants struggling to pay rent.
Half of US renters spent more than 30% of their income in 2022 on rent and utilities, according to a new American Rental Housing report by the Joint Center for Housing Studies at Harvard University.
The report considers those who spend 30% or more of their income on housing “rent-burdened” or “cost-burdened,” meaning those high costs could make it difficult for them to meet other necessary expenses.
The proportion of renters with a cost burden increased by 3.2 percentage points from 2019 to 2022.
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“The places in the market that need the most relief are at the very low end, and it’s hard to reach those people through market rate provision alone,” said Whitney Airgood-Obrycki, lead author and a senior researcher focusing on affordable housing at the Consortium.Harvard University Housing Research Center.
Although the cost burden has increased across income levels, the consequences are much greater for low-income households, Airgood-Obrycki said.
‘We have a very inaccessible country at the moment’
Average residual income, or the amount of money available after paying for rent and utilities to meet other needs, has fallen significantly for lower earners, the study.
“It’s a really important part of the conversation because … it humanizes the enormity of this problem,” Airgood-Obrycki said.
The average median income was $310 per month in 2022, the Harvard study found. For perspective, a single-person household in even the most affordable counties needs about $2,000 per month for non-housing needs, according to the Economic Policy Institute.
“The problem is that we have a very unaffordable country right now,” she said. “If you go through any kind of life crisis, you’re on the verge of homelessness.”
Most young adults have stayed at home with their parents or moved back in because of the cost of living.
Share of young adults living at home dates back to the 1940s
Historically, what kept young adults living at home was that they had a job; today, it’s a lack of affordable housing, according to Susan M. Wachter, a professor of real estate and finance at the Wharton School of the University of Pennsylvania.
The percentage of Gen Z adults who live at home “takes you all the way back to 1940, the end of the Great Depression,” Wachter said.
The proportion of young adults between 18 and 29 who live at home with parents is close to 50%, according to a study co-authored by Wachter.
That’s a result of young adults competing with homebuyers, who are themselves being priced out of the single-family housing market.
“They are competing in a way they haven’t before,” she said. “The home mortgage market is indirectly driving demand into the rental market, making the rental market unaffordable.”