Dive Brief:
- Nearly 60% of renters report that the cost of renting their apartment has risen in the last 12 months, according to the results of a new survey by Freddie Mac, which polled 2,000 Americans aged 18 and older in early June.
- Out of all renters who had experienced a rent increase in the past year, one-third noted that their housing costs had risen by more than 10%. Almost 20% said they were now extremely likely to miss a payment on their rental housing.
- Thirty-eight percent of those who identified as renters had received a raise in the last 12 months, compared to 48% of all subjects. However, one-third of them still said they would not be able to cover their higher rent.
Dive Insight:
Almost every respondent — 96% — reported that they had felt the impact of rising prices in the past year. Sixty-six percent cited the cost of groceries and household necessities. Transportation, eating out and utilities were also among the most common areas where consumers felt the impact of higher costs.
In response to higher cost burdens, nearly half chose to spend less on “non-essentials” such as entertainment. Many also put less toward savings, spent less on food and other necessities and delayed non-essential repairs.
“The surge in rents that took place over the last 12 months has created even greater housing uncertainty for the most vulnerable renters,” Kevin Palmer, head of Freddie Mac Multifamily, said in a press release. “Our survey shows that the national housing affordability crisis is worsening, and that inflation is a key driver.”
Approximately 70% of respondents said they either did not have enough money for basics or lived paycheck to paycheck. Sixty-nine percent are worried about their ability to pay for housing. An impending recession, rising interest rates and having less to put toward saving are among respondents’ most common worries.
In turn, well over half of renters reported their plans to buy a home, rather than rent, had changed in the past year. Of that number, just under half were significantly less likely to buy a home than they had been a year earlier. Rising prices were the top reasons renters had changed their minds, followed by inability to save for a down payment.
