According to Harvard's Joint Center for Housing Studies, nearly half of renters in the United States are unable to afford their monthly rental payments, an article from CNN.com reported.
It is usually recommended that renters keep their housing costs at around 30 percent of their monthly income however the number of "cost-burdened" renters have increased to 21.3 million compared to last year. From this number 28 percent are described as "severely cost burdened" and allots more than have of their monthly income to pay for rent.
Experts say that the problem is simple. Rents are increasing compared to wages. Rents have increased 7 percent from 2001 to 2014 while incomes have decreased 9 percent. Along with these there is also an increase in demand for rental properties pushing the national vacancy rate to a 30-year low. This force drives home prices even higher than what it was before.
According to the report, "These trends have led to record numbers of renters paying excessive amounts of income for housing, with little prospect for meaningful improvement." It was also reported that the median rent for new apartment units have also increased to @1,372 last year; this is a 26 percent increase from 2012
Middle-income households are now finding it hard to make ends meet most especially paying rent. The number of financially-troubled households earning from $45,000 to $74,999 increased to 21 percent in 2014 from 12 percent in 2001.
There is an increase in the construction of new homes however supply has not kept with the increasing demand; these new homes focus on the higher end of the market.
The increase in rent greatly stresses the household budget. Most of the time, families have to pay half of what they are earning and spend less money on food and healthcare.
