Half of tenants spend over 30% of their income on rent

Things are pretty bad for today’s renters. In fact, nearly half of all U.S. tenants are cost-burdened, spending more than 30 percent of their monthly income on rent.

According to the most commonly accepted measure of housing affordability, a household is considered to be “cost-burdened” if housing costs eat up more than 30 percent of household income.

By that metric, 49.7 percent of American renter households were cost-burdened, according to data from the Census American Community Survey. 

With millions of Americans continuing to struggle with housing costs, the CDC has issued a temporary halt in evictions through the end of the year, to replace the earlier patchwork of federal, state, and local protections that have now expired.

As the situation rapidly evolves, widespread difficulty with housing costs has been a troubling constant. Despite a slight improvement in this month’s data, 29 percent of Americans failed to pay their rent or mortgage in full during the first week of September, and 8 percent had not completed their August payment by the end of the month.

Despite the slight improvement in September payments, many renters are still worried about unpaid rent obligations from prior months. One-in-three renters started September with outstanding back rent owed, nearly unchanged from August.

Among those with unpaid rent bills, close to half owe their landlords less than $1,000, while just five percent of all renters owe more than $2,000.

These results indicate that another round of stimulus payments of a scale similar to those that went out earlier this year could help a significant share of renters catch up on their rent but Republicans in Washington DC show no interest in spending on people.

The pandemic has exacerbated long-standing concerns around financial instability and housing insecurity. These challenges, however, have not affected all segments of the population evenly.

Segmenting survey data by race illuminates significant variation in the prevalence of unpaid housing bills.

The share of white renters with unpaid rent is well below the overall rate at 24 percent. Meanwhile, Black and Hispanic renters are far more likely to owe unpaid rent,

In addition to being more likely to rent, Black and Hispanic households are also more likely to work in service occupations where layoffs and furloughs have been most heavily concentrated.

As of the first week of September, 25 percent of white survey respondents had not yet made a full on-time rent or mortgage payment for the month.

This rate for both Black and Hispanic respondents stands at a distressing 43 percent, while Asian respondents fall between these extremes with a first-week missed payment rate of 30 percent.

As our society continues to grapple with the reality of systemic racial inequities, these data offer yet another reminder of how starkly these disparities play out in the housing market.

Weighed down by unpaid rent and mounting concern about future evictions, many renters are making significant financial sacrifices to keep up with rent payments.

Fifty-eight percent of the renters say that they have cut their spending since the start of the pandemic, while an even larger share (63 percent) have taken more extreme measures, such as drawing on savings, borrowing, or selling assets.

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