Half of Americans can't afford rent, new study finds

Record rent prices have stretched paychecks to the brink, according to a new report.

According to Harvard University, a record-breaking 50% of all U.S. renters are now classified as "cost-burdened," meaning that they spend more than 30% of their income on rent and utilities.

"We actually saw increases across every single income category that we look at, which sort of surprised us," said Whitney Airgood-Obrycki, the study's lead author and research associate at Harvard's Joint Center for Housing Studies.

An additional two million households became cost-burdened between 2019 and 2022, an increase of 3%. Households making $30,000 to $74,999 saw the largest jump in the percentage of their income spent on housing.

Full-time working Americans renting a place didn’t catch a break either. One-third of them were cost-burdened.

Low-income earners hit hardest

The burden is especially crushing for the lowest earners. An astonishing 83% of renters making under $35,000 a year are now cost-burdened, compared to 8% of those earning over $75,000.

The low-income group has only $310 left at the end of the month after paying for rent and utilities, which is less than half compared to as recently as a few years ago.

"We simply don't have enough homes that people can afford," says Jeff Olivet, executive director of the U.S. Interagency Council on Homelessness.

"And when you combine rapidly rising rent — that it just costs more per month for people to get into a place and keep a place — you get this vicious game of musical chairs."

Rent growth is slowing, but not fast enough

Although nearly back to record highs, rent prices have slowed down as of late.

Just this month, Redfin reported a modest 0.8% year-over-year increase in asking rents after 11 months of decreases. So, the good news is that prices are losing momentum.

The bad news: rent prices are still near record levels. Last month, the median asking rent price was just shy of the record-high of $1,700, set back in August 2022.

Airgood-Obrycki says building more homes is not going to help, contrary to what the Biden administration has said.

"What we are building is at the high end, because of the increased cost of construction and because we have a lot of demand from higher-income renters," Airgood-Obrycki told NPR.

Most new apartments over the last decade have gone for $1,400 a month or higher, "and that's not affordable to the majority of renters."

A recent report from the University of Kansas agrees that more supply won't solve the affordability problem because there is a shortage of affordable homes, not housing as a whole.

Meanwhile, Airgood-Obrycki adds that more focus is needed on other ways to decrease housing costs, including increased subsidies, housing vouchers, and more cooperation between state and federal governments.