In the United States, the housing crisis is not only reflected in expensive housing prices, but also in a significant increase in rent since early 2020. A recent report from the Harvard Joint Center for Housing Studies reveals that national rent has surged by 26% since the beginning of 2020. While the growth in rent has somewhat slowed with the rise of new multi-family housing units, three-fifths of the real estate market still see rent prices on the rise.
According to Harvard University’s findings up to 2022, half of renter households are facing cost burdens, meaning they are spending over 30% of their income on rent. This is the highest proportion recorded since the U.S. Census Bureau began collecting such data.
The number of severely cost-burdened individuals, who allocate more than 50% of their income to rent, also hit a historic high in 2022.
Alexander Hermann, a senior researcher at the Harvard University Joint Center for Housing Studies, stated in a release, “For decades, rent growth has outpaced income growth. However, the rent spikes during the COVID-19 era have led to an unprecedented affordability crisis that is still ongoing.”
Research indicates that low-income groups and people of color are among the most vulnerable renters. Some communities across the U.S. – from Naples, Florida to Corvallis, Oregon – are facing the highest instances of renter cost burdens.
In Florida, five metropolitan areas have over 60% of their renters facing cost burdens. Naples-Marco Island and Port St. Lucie, Florida top the list nationwide with approximately 64% of renters spending over 30% of their income on housing.
Two metropolitan areas in Pennsylvania, State College and East Stroudsburg, rank in the top ten for renter cost burdens at 63% and 61%, respectively.
In certain housing markets in the U.S., over 40% of renters are facing severe cost burdens, utilizing more than half of their income for housing.
According to the report, Stillwater, Oklahoma has the highest proportion in the nation of severely cost-burdened renters at 45%. The median income for renters in the area is $22,000 annually, with a median rent of $11,160 per year.
Corvallis, Oregon, Port St. Lucie, Florida, State College, Pennsylvania, are also among the top ten cities for renter cost burden and severe cost burden.
Renters are increasingly finding it difficult to afford homeownership with rising housing prices and mortgage rates. The Harvard University report notes that the U.S. housing price index has risen by 47% since early 2020, with the median housing price approximately five times the median household income.
Many homeowners are also grappling with rising costs of insurance, home maintenance, and property taxes. The report reveals that from 2019 to 2022, the number of cost-burdened homeowners (those spending over 30% of their income on housing and related expenses) increased by about 3 million people.