rising rent trend
Many families today in the United States spend a huge amount of their income paying for housing. The number of households spending nearly half of their income on rent is expected to rise greatly in the next 10 years.
According to new research by Harvard University’s Joint Center for Housing Studies (JCHS) and Enterprise Community Partners Inc. (Enterprise), the number of households spending 50% of their income on rent is expected to increase by 11% by 2025. This means the 11.8 million households currently using half of their income on rent will be joined by another 1.3 million for a total of 13.1 million.
The study shows an increase in the affordable housing crisis in the US. The largest increases in this issue are expected among older Americans, Hispanic households, and single-person households.
According to Florida Realtors, the study showed that even with positive changes in income trends and rent trends, other demographic forces like the rapid growth of minority and senior populations, the trend of rising rent will continue.
“Our analysis shows that even in the unlikely event that income growth greatly outpaces rent gains, the number of severely cost-burdened renters will remain near current record levels,” says Christopher Herbert, managing director of Harvard’s Joint Center for Housing Studies. “Given these data, it is critical for policymakers at all levels of government to prioritize the preservation and development of affordable rental housing as there are simply not enough quality, affordable rental units to provide housing for the millions of households paying over half their income in rental costs.”
The study also asserted that the US already has a big problem providing homes to low-income households.
“At last measure, 11.2 million extremely low-income households competed for 7.3 million homes affordable to them – a 3.9 million home shortfall,” say study authors. “Just over a quarter of eligible very low-income households received rental assistance, leaving 7.7 million unassisted very low-income renters with worst case housing needs in 2013,” according to HUD.
While right now is a great time to buy or sell a home, the economy and institutions surrounding real estate need to make changes to help out lower income households.