The financial health of U.S. renters

Today, around 60 million U.S. households rent their home.¹ 

With more people renting now than ever before, we decided to take a closer look at what it means to be a renter in today’s economy.² In this post, we’ll break down how rental debt and the recent spike in rent rates are affecting households throughout the country, especially those with lower incomes.

Rental debt is on the rise, with around 15% of renters behind on their rent payments, with reasons ranging from inconsistent pay schedules to loss of income.³

States with a higher cost of living tend to have more rental debt, with California having the highest dollar amount at around $5,300, and New York in a close second at around $4,500.⁴ Michigan, on the other hand, has an estimated debt per household of around $2,900.⁵

The amount of rental debt owed varies significantly from state to state, and for households that can’t catch up, especially those that lack savings, eviction is likely the only conclusion.

With median rent rates increasing twice as fast as median salaries, renters are struggling to rent homes in the area they desire.⁶ 

Average rent nationwide has increased to $1,827, nearly 17% more than the year before.⁷ For households who can no longer afford their current home at lease renewal because of a rent increase, being forced to pick up and move could be even more jarring.

For many low-income families, the short-term effects of inflation could have longer-term consequences, especially as rent rates continue to rise, with average rent prices targeted to reach $2,000 in coming months.⁸

Sources:

1. “Rent Debt in America: Stabilizing Renters Is Key to Equitable Recovery,” National Equity Atlas (https://bit.ly/3RbqrkM)
2. “More U.S. households are renting than at any point in 50 years,” Pew Research Center (https://pewrsr.ch/3tuBhY8) 
3. “More Than 8 Million Americans Are Late on Rent as Prices Increase,” Bloomberg (https://bloom.bg/3aORvq6)
4. “Renters are behind $3,700 in rent, on average. This map shows a state breakout,” CNBC (https://cnb.cx/3KMj2pK)
5. “Renters are behind $3,700 in rent, on average. This map shows a state breakout,” CNBC (https://cnb.cx/3KMj2pK)
6. “More Than 8 Million Americans Are Late on Rent as Prices Increase,” Bloomberg (https://bloom.bg/3aORvq6)
7. “Tenants struggle with rising rent as prices hit all-time highs,” USA Today (https://bit.ly/3R5LxRs)
8. “Tenants struggle with rising rent as prices hit all-time highs,” USA Today (https://bit.ly/3R5LxRs)