More Than 1 in 4 Pay More Than Half Their Income for Rent
NEW YORK (TheStreet) -- There was a brief period back in 2009-10 when renting was "cool," back in vogue after millions of U.S. homeowners saw the value of their houses plummet and many suffered foreclosures or saw the value of their homes go underwater.
So much for the American Dream of homeownership, the conventional wisdom had it. Only saps would pour good money into a underappreciating asset, and it was better to "scale down" and simplify one's life without the financial and emotional burden of homeownership.
That was then, and this is now.
We reported last week that U.S home prices are back on the upswing, rising 7.5% in 2013, according to the National Association of Realtors.
Perhaps not by coincidence, renters are seeing more of their income eaten by rental housing costs.
According to the Washington, D.C.-based Center for Housing Policy's Housing Landscape report, released Friday, an alarming number of U.S. renters spend half of their household income on rental costs:
For the third year in a row, the incidence of severe housing cost burden among working renters has risen relative to the prior year. More than one in four working renter households (26.4%) spent more than half of their income on housing costs in 2011 -- an increase of more than three percentage points since 2008.
Of course, that means 75% of U.S. renters didn't spend half their income on housing over the same period. Are they in trouble too?
Maybe, says the center, as the underlying problems linked to household income and rental costs (such as underemployment and thinner paychecks) really haven't gone away.