Half of the tenants are unable to afford their rents

More than 50% of the US tenants are unable to afford their monthly rents. The reason is the continuous upgrade of rent amount to a drastic decrease in total household income.

According to Sun Times Network, Harvard's Joint Center for Housing Studies mentioned the study, which revealed that housing costs should be around 30% of tenant's monthly income. But the number of the tenants, living under the pressure of paying more 30% of their monthly income has deliberately increased to 21.3 million people last year.

Among them, 26% are labeled as "severely cost burdened" as they try to pay their monthly rent by spending half of their hard-earned income, as reported by WDAM. The reason behind the problem is quite evident. The wage increase is much lower than the increase in rental rate.

The recent reports showed that between the time span of 2001-2014, 7% increase was seen in Inflation-adjusted rents while the household incomes dropped drastically by 9%. This is not enough, as the national job opportunity rate suffered through 30-year low due to increasing in rental unit demand and the even high driving prices.

"These trends have led to record numbers of renters paying excessive amounts of income for housing, with little prospect for meaningful improvement," the report said.

A great change of increase of $1,372 was observed in the median rent for a new apartment previously in 2014. The increase was up to 26% as compared to 2012, as mentioned by CNN Money.

The high rent rate is highly affecting low-income households, who are under greater pressure to balance their necessities and rent. Not only that, it is greatly crushing the middle-income households too, who are struggling hard to pay their rents.

 In 2001, the total number of rent-burdened households, generating an income of $45,000-$74,999 was 12%. However, in 2014, the percentage increased to 21%.

Builders are upgrading the strength of the construction of buildings. But the supply of the material is not matching the level of demand as it is too low and due to that, the price of the supply is quite high in the market. The cost of land for buildings and regulations is quite high.

The reports also mentioned that high rent rate has jeopardized household budgets. Those families, who are paying rents by consuming half of their hard-earned incomes face many side effects in maintaining their other basic necessities.

Their expenditure on food decreases by 38% and that of health care by 55%. The highest rental demand was seen last year with the 37% of the household renting. This level has not been reached since 45 years.