Nearly half of renters spend more than 30% of income on housing, Census Bureau finds

Published On Sep 12, 2024, 6:07 AM

The Census Bureau has reported that nearly half of U.S. renters, over 21 million households, now spend more than 30% of their income on housing costs, categorizing them as 'cost-burdened'. This situation has worsened as housing costs increased from 2022 to 2023. The study highlights significant disparities, showing that the proportion of rent-burdened households varies notably across different races. For example, 56.2% of Black or African American renters are financially strained by their housing costs. Even among homeowners, about 18.8 million are similarly burdened.

Stock Forecasts

The increase in cost-burdened renters signifies a potential downturn in consumer spending, as more disposable income is allocated to housing rather than discretionary purchases. This trend may negatively affect various sectors such as retail, dining, and entertainment, leading to stricter earning forecasts for companies in these areas. Furthermore, continued high housing costs could affect construction and real estate markets negatively as affordability challenges persist, potentially leading to lower demand for new developments or residential services.

Real estate investment trusts (REITs) that focus on affordable housing may see increased demand as more individuals seek lower-cost housing options. Companies in this sector might experience relative stability compared to broader market trends. However, overall affordability issues might still pressure rental growth rates.

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