Rent Affordability Crisis Hits 24% of American Renters, Survey Finds

A recent survey conducted by Intuit Credit Karma has revealed that approximately 24% of American renters are grappling with rent affordability issues. The survey, which involved over 1,200 U.S. adults and took place online from Nov. 20-26, sheds light on the challenges faced by a significant portion of the renting population.

According to the report, the total share of adult Americans who are currently renting amounts to 36%. Among them, millennials seem to be the most affected, with slightly under one-third (30%) expressing difficulties in covering their rent. Generation Z follows closely behind, with 27% facing similar challenges.

In a concerning trend, the survey notes that one in 10 Americans aged 69 and older reported that they “can no longer afford to pay their rent.”

A separate report from Redfin, an online real estate brokerage, highlights that the median U.S. asking rent in December was $1,964, reflecting a marginal 0.2% month-over-month decrease. However, the median price landlords were requesting from renters remained only 4.4% cheaper than the record-high $2,054 seen in August 2022.

Chen Zhao, the economics research lead at Redfin, suggests that the decline in rents is primarily driven by high supply rather than low demand. However, he warns that if mortgage rates continue to drop in 2024, it could lead to a decrease in rental demand as more Americans opt for homeownership, potentially leaving landlords with more vacancies.

The current average rate for a 30-year fixed mortgage is 6.62%, according to Freddie Mac.

The Intuit Credit Karma survey also uncovered that 38% of renters have been forced to give up certain necessities to meet their rent obligations. Additionally, the financial strain caused by rent affordability issues has led 19% of renters to seek housing assistance from family and friends, with Gen Zers and millennials being the most impacted at 25%.

Furthermore, the survey revealed that 46% of Americans harbor pessimistic outlooks about their prospects of ever buying a home, emphasizing the challenges many face in the current housing market.

“Our research shows more than half of Americans (57%) allocate the majority of their income toward housing costs, leaving little room elsewhere in their budgets,” stated Courtney Alev, consumer financial advocate at Intuit Credit Karma. “In general, it’s recommended that consumers allocate half of their income for essentials, including housing and other necessities, like groceries and household bills.”

Despite a slight decline in median asking rents for three consecutive months, December’s figures still represented a 0.8% drop on an annual basis, according to Redfin. The online real estate brokerage attributes this decline to the high number of rentals available in the market, among other factors.