Survey Finds that Over 20% of Renters Use Entire Paycheck to Cover Rent
13 percent of U.S. renters have reported tapping into their retirement funds to cover rent expenses.
More than 22 percent of U.S. renters use their entire regular income to pay for rent, a recent survey commissioned by real estate brokerage firm Redfin revealed.
14 percent of renters rely on cash gifts from family to pay rent, with 13 percent withdrawing money from retirement funds early for housing expenses. Additionally, 12 percent have reduced contributions to their retirement savings to prioritize immediate financial needs over long-term security.
Other strategies employed to afford rent include receiving government assistance (18 percent), living with relatives or friends to save money (14 percent), nonprofit assistance (7 percent), selling stock investments (7 percent), utilizing inheritance (5 percent), and selling cryptocurrency investments (5 percent).
Rental prices have outpaced wage growth, posing challenges to many Americans, especially those with lower incomes, in affording housing.
Redfin Senior Economist Sheharyar Bokhari mentioned, “Rents are stable nationwide but can vary significantly depending on your location. The East Coast and Midwest have seen less construction activity, leading to rising rents. Conversely, in Sun Belt cities where construction surged post-pandemic, rents are declining rapidly.”
Cities like Washington and Cleveland experienced significant rent hikes, while Jacksonville saw a notable decrease. Despite the challenges, renting remains popular due to affordability issues in the home-buying market.
The analysis also highlighted that the number of renter households is growing three times faster than homeowner households, mainly because buying costs have risen faster than renting expenses.
Redfin suggested that rental affordability could improve with the introduction of more newly constructed apartments into the market.