Rental prices in the United States are now less affordable than ever, with financial strain rising the fastest among middle-class earners, according to a report.
At least 22.4 million renter households, or half of all renters in the U.S., spent more than 30% of their income on rent and utilities. Middle-class earners making $30,000 to $74,999 each year saw the sharpest rise in cost burden. That is according to a new report from the Harvard Joint Center for Housing Studies, which analyzed the 2022 census data.
The analysis also found that 12.1 million households were "severely cost-burdened," which meant they spent more than 50% of their income on housing. Among all severely cost-burdened renter households, 39% spent less on food, and 42% spent less on healthcare than their unburdened counterparts. Some also chose to live in overcrowded or structurally inadequate housing conditions.
In addition, the study also found that 653,100 Americans were homeless on a given night in January 2023, marking a new record.
"These losses have contributed to a decades-long challenge for renters: rent increases are outpacing income gains. Median rents have risen nearly continuously since 2001 in inflation-adjusted terms and are 21 percent higher as of 2022. Meanwhile, renters' incomes have risen just 2 percent during the same period," the report read.
How Did the COVID-19 Pandemic Affect Renter Households?
The study found that renter households in the U.S. are still facing the financial consequences of the COVID-19 pandemic. During the peak of the pandemic, rental prices rose by double-digit percent as more Americans moved homes due to the remote working trend.
Rental prices went down by nearly 1% last year but are still 19% higher than prices at the start of the pandemic, per the New York Times, citing data from Apartment List.
The Harvard study's findings come after a study by Intuit Credit Karma found that 24% of renters in the country could no longer afford to pay rent. Those numbers increased to 27% among Gen Z renters and 30% among millennials.
Among renters who could pay their rent, 38% said they had to sacrifice basic necessities just to have enough money to make ends meet.
READ MORE: More Than 20% of Americans Struggle To Pay Rent Amid Home Affordability Issues