More Americans are finding themselves 'house poor' as high housing costs continue to burden households across the country. According to an annual report by Harvard on housing, half of all renters are allocating over 30% of their income towards housing expenses.
The Struggle:
Cody Hanson, a co-owner of Skull and Dagger Tattoos in Littleton, Colorado, is no stranger to the challenges posed by increasing housing costs. Hanson expressed his concerns, stating, "The dollar doesn't go as far as it once did. You now have to pay like a mortgage just for a simple apartment."
Financial Burden:
Financial experts recommend that individuals should not exceed spending more than 30% of their income on housing, encompassing rent or mortgage payments along with utilities. However, a recent report from the Joint Centers for Housing Studies of Harvard University revealed that nearly 1 in 4 homeowner households are surpassing that threshold.
Rental Crisis:
Renters are facing an even steeper uphill battle, with almost half categorized as 'house poor,' marking a record high of 22.4 million households struggling with housing costs. The Harvard study attributes the escalating costs to the rapidly rising rents outpacing wage growth, coupled with a significant decrease in affordable housing units under $1,000 a month.
Root Causes:
The report points out that for homeowners, the challenges stem from the hefty expenses associated with purchasing and financing homes in a competitive market, alongside surging insurance premiums and property taxes. Meanwhile, renters are grappling with the relentless surge in monthly rents, outpacing income growth and depleting the availability of affordable housing options.
The findings underscore the pressing need for comprehensive solutions to address the escalating housing affordability crisis gripping a significant portion of the American population.