A study at Harvard’s Joint Center for Housing Studies has found that in 2022, half of all US renters were cost burdened. The number of renter households spending more than 30% of their income on rent and utilities rose by 2 million in just three years to a record high of 22.4 million, the study found.
The extended period of rising rents during the Covid-19 pandemic propelled rent unaffordability to an all-time high, and the United States’ paltry supply of low-rent housing units only made the situation much worse. According to the study, only 7.2 million housing units nationwide had contract rents under $600 in 2023, which represented a loss of 2.1 million units since 2012.
The cost burdens have been the highest for middle-income renters, who make anywhere from $45,000 to $74,999 annually. High housing costs force households to reduce spending in other areas that are critical well-being. The study found that in 2022, severely cost-burdened renter households in the lowest expenditure quartile spent 39% less on food and 42% less on healthcare than their unburdened counterparts.
Even though the rising cost of debt and equity have pushed property prices down and rental markets have cooled after having overheated during the pandemic, housing cost increases have outpaced income gains for renters.
The number of people experiencing homelessness in the USA hit an all-time high of 653,100 people in January 2023, according to the report.
The climate crisis is bound to put the American housing market under further stress, and extreme weather variability and rising temperatures caused by climate change are expected to increase energy and insurance costs, and in turn, renters’ housing costs.