Nearly 20% of Americans Struggle to Pay the Rent. Here’s Why
I recently had a conversation with my parents about why my generation financially struggles.
Like many baby boomers, they assumed it was the result of poor decisions or laziness.
Like good parents, they believed me. But now I also have proof.
Apartment List recently analyzed census data from 1960 to 2014 to “understand how rent and affordability have changed over time.”
“Inflation-adjusted rents have risen by 64%, but real household incomes only increased by 18%,” writes Apartment List director of data science Andrew Woo.
WHAT? Give me a sec while I pick my jaw up off the floor…
Why It’s So Hard to Pay Your Rent
So, yes, incomes have risen -- 15-25% since 1980, Woo says -- but rents have risen “twice as fast.”
That’s a huge burden on the 37% of Americans who rent -- which, by the way, is a higher percentage than ever before.
Of these people in rental housing, 74% are under the age of 44, and 51% are under 30.
Nearly half of renters (49%) are considered “cost-burdened,” Woo explains, meaning they spend more than 30% of their income on rent.
That number has almost doubled since 1960, when 24% of renters were cost-burdened.
Throw in the average student loan, which is 56% higher than just 10 years ago…
Then child care costs, which have risen more than 70% since 1985…
The cost of living is overwhelming.
And it’s an understatement when Woo notes: “Nearly half of [renters] are struggling to pay the rent.”
Here are the grim findings in picture form.
So, what if things had gone differently? If rents had risen, you know, at the rate of inflation?
“The average renter would be paying $366 less in rent each month,” Woo writes.
$366 per month. $4,392 per year.
So, what can you do (besides bang your head against the table)? Here are a few posts that might help:
Your Turn: How do you afford your rent?
Susan Shain, senior writer for The Penny Hoarder, is always seeking adventure on a budget. Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.