The Number of Cost-Burdened Renters Reaches a Record High
Renters are increasingly forced to allot a larger portion of their income toward housing expenses. According to data analysis released by Apartment List, the number of cost-burdened renter households surged by 1.9 million since 2019, resulting in a total of 21.8 million in 2022.
To meet the definition of “cost-burdened” or “severely cost-burdened,” households must spend more than 30 percent and 50 percent, respectively, of their gross income on rent. Notably, the number of severely cost-burdened renters saw the greater increase of those two categories.
Affordability challenges stem from the increase of rent prices outpacing that of income growth. While both saw upturns from 2019-2022, rent prices rose approximately 19 percent compared to the approximate 16 percent income increase.
By The Numbers:
California, at 56 percent, ranks fourth in the nation for states with the highest percentage of cost-burdened households, behind Florida (60.3 percent), Hawaii (57.8 percent), and Nevada (57.3 percent). Three of the top five metro areas with the highest percent of cost-burdened renters are located in the Golden State: Riverside (60.2 percent), Sacramento (59.1 percent), and San Diego (58.3 percent).
In comparison to renters, homeowners appear to fare better, with a lower percentage falling into the cost-burdened category. California homeowner households considered cost-burdened in 2022 was approximately 38 percent, compared to approximately 56 percent of rent-burdened households. Over the past decade, the national percentage of cost-burdened homeowner households has tracked lower than renter households, which can be attributed to factors not expounded upon in this analysis. However, homeowners are not immune to affordability challenges as the national average of cost-burdened households rose from 26.6 percent in 2019 to 27.9 percent in 2022, a trend similarly followed in California.
The analysis by Apartment List provides empirical data to a prevailing theme: housing affordability is burdening an increasingly substantial portion of the American population. With more renters facing economic challenges to afford essential housing cost, it prompts the question of how this data could influence potential homebuyers and sellers in the coming years. While no panacea exists to solve this crisis, housing affordability continues to be a primary focus for policymakers and others alike.