Over the past three years, rent costs have risen dramatically for Americans as inflation and housing constraints push expenses up, according to data from Harvard’s America’s Rental Housing 2024 report.
Renting unaffordability has reached an all-time high, with 22.4 million households spending more than 30% of their income on rent and utilities, up by 2 million in just three years, canceling out increases in affordability seen in 2014 and 2019, according to the report from Harvard. The resulting increases in costs have raised the number of cost-burdened renters to 50%, up 3.2 percentage points since 2019.
The number of low-rent units, those below $600 a month, adjusted for inflation, has fallen by 2.1 million since 2012, totaling just 7.2 million units in 2022, according to the report. The constriction in supply was especially pronounced from 2019 to 2022, with the number of low-rent units dropping by more than half a million.
The trend of median rents rising faster than income has continued over the past few years, with rents being 21% higher in 2022 as compared to 2001 in inflation-adjusted terms, while incomes have only increased 2%, according to the report.
Following the increases in the costs of rent, the number of homeless people has increased by 48% from 2015 to 2023, rising by 83,000 people, according to the report. States like California, Washington and Oregon had quick growth in homeless populations due to constraints in housing supply and high costs.
Shelter has been hit disproportionately hard by price increases from inflation, rising 18.7% since January 2021, when Biden first took office, according to the Federal Reserve Bank of St. Louis. In contrast, general inflation has risen 17.7% in that same time frame.
Unaffordability for homes has also increased dramatically, with home prices reaching an all-time high in October, rising 4.8% year-over-year.
The supply of new homes has been constricted in part by a lack of construction workers, with the Home Builders Institute estimating that the U.S. will need 723,000 new construction workers every year to keep up with current demand. An estimated 1.5 million new homes will need to be built before 2030 to meet growth expectations.
Mortgage rates have also pushed housing costs up, with the average for a 30-year mortgage nearly exceeding 8% in October.
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