11 million Americans spend half their income on rent

[FLPanhandle]

http://money.cnn.com/2016/06/22/real_estate/rent-affordability-housing-harvard/index.html



The number of renters dedicating at least half of their income toward housing hit a record high of 11 million people in 2014, according to the annual State of the Nation's Housing Report from the Joint Center for Housing Studies of Harvard University.

A total of 21.3 million are spending 30% or more of their paycheck to cover the rent -- also a record high.

Personal finance experts generally suggest budgeting around 30% of monthly income to cover housing costs.

But that's getting harder to do with rent prices rising faster than wages.

Losing such a large portion of a paycheck to cover housing means cutting back in other areas.

"When you have to dedicate such a high proportion of your income to rent every month, it forces you to make difficult decisions," said Dan McCue, a senior research associate at the Joint Center.

Not only does that mean less spending on essentials like food, clothing and health care, it also makes it tougher to achieve long-term financial security by saving for an emergency fund, a down payment or retirement.

Middle-class renters in expensive cities are struggling

In the 10 cities with the highest housing costs, renters with middle-class incomes are having a particularly hard time making ends meet. Nearly 75% of renters earning $30,000-$44,999 and 50% of those making $45,000-$75,000 living in these hot markets are considered "cost-burdened" -- meaning they spend at least 30% of their income on rent.

It's not just young people who are renting

"The shift toward renting has been widespread among age groups, incomes and different types of households," said McCue.

Last year saw the biggest surge in new renters in history, according to the report, bringing the number of people living in rental units to around 110 million people -- or about 36% of households.

Middle-aged renters made up a lot of the new demand, with 40% of renters aged 30-49.

And renters are sitting on both ends of the pay scale: almost half of new renters in 2015 earned less than $25,000, while top-income households have been the fastest-growing segment of new renters for the past three years.

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This is a risk to the economy. If a high percentage of disposable income is tied up in rent, then people won't be able to spend money in other areas.

[seabeckind]

1. Two variables in that equation.

Focusing on the rent tends to distract from the income side of the equation.

Like income for working people stagnant for 30 years while expenses keep going up.

Like the job devastation with race to the bottom and the outsouring.

Like the wage slavery because of the erosion of labor rights.

And so the blame must be placed on the landlords but that

ignores the fact that so many rentals are owned by investment firms far away from the actual rent operation. And these firms benefit from the lack of competition hiding behind lack of enforcement of anti-trust.

[FreakinDJ]

2. Meh - who needs a working class

We have Wall Street

[smirkymonkey]

3. K&R

[Initech]

4. The rent is too damn high and the pay is too damn low.

[Runningdawg]

5. In Tulsa modest apartments

that the middle class could afford are being torn down. Okies have discovered "lofts". Rent for one of those quickly vanishing apts is around 600 month. Rents start at 1400.00 for 400sf in one of the new ones.
I lived in NYC in the late 70's rent was $1000/month for a one bedroom apt. We slept 6 to 8 on a regular basis.
I have been saying for sometime now, people need to get ready to live in communes again, its the only way to beat the system.