February 21, 2023

Burden of Excessive Rents Surged throughout COVID

Because the dangerous first two years of the pandemic recede within the rear-view mirror, a brand new report reminds us how robust issues received for renters.

In 2021, a file 21.6 million U.S. households had been paying greater than 30 % of their earnings on lease, which is the actual property business’s benchmark for folks whose housing prices have develop into a monetary burden. That quantities to simply below half of all renter households who had been struggling throughout COVID – very near the excessive reached through the Nice Recession.

And the overwhelming majority of the 1.2 million improve from 2020’s stage was within the group that struggles essentially the most: households who pay greater than 50 % of their earnings to lease a home or condominium.

Two issues had been occurring which have elevated the burden on renters, in line with a lease report by Harvard’s Joint Middle for Housing Research. First, rents rose unabated all through the pandemic and are 25 % greater than they had been on the finish of 2019.

However the housing middle factors to a second issue that added to the burden: renters, who are likely to have decrease earnings, misplaced earnings through the pandemic. The downward shift of their earnings illustrates that. The variety of renter households incomes lower than $30,000 elevated by 223,000 in 2021, whereas the quantity incomes greater than $75,000 dropped by 280,000.

The change within the renter inhabitants marked “a shift in the direction of households which are more likely to expertise value burdens,” the report mentioned.

There’s an opportunity the report for 2022 will present modest enchancment. Common hourly wages rose considerably final yr, and realtor.com says the torrid tempo of lease will increase is beginning to ease.

However how a lot the economic system slows down and whether or not individuals are laid off will decide how the subsequent couple of years go.

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