Story at a glance
- A survey from Freddie Mac found that nearly 1 in 5 renters whose rental costs rose in the past year believe they are likely to miss a payment.
- Only a third of renters who earned pay raises in the past 12 months said their new incomes will cover their rent.
- More than 40 percent of consumers surveyed said they live paycheck to paycheck.
Most American renters experienced rent increases over the past year while less than 40 percent saw their wages increase, according to a new survey.
The survey from Freddie Mac found that nearly 1 in 5 renters whose rental costs rose believe they are likely to miss a payment. Only a third of renters who earned pay raises in the past 12 months said their new incomes will cover their new rent.
“The surge in rents that took place over the last 12 months has created even greater housing uncertainty for the most vulnerable renters,” Kevin Palmer, head of Freddie Mac Multifamily, said in a media release.
“Our survey shows that the national housing affordability crisis is worsening, and that inflation is a key driver,” Palmer added.
Almost half of consumers said rising prices have forced them to cut non-essential expenditures, like entertainment. Another 44 percent said they put less into their savings.
More than 40 percent of those surveyed said they live paycheck to paycheck.
Rising prices have also impacted renters’ housing plans, as more than 70 percent said they are less likely to buy. Among those whose plans have changed due to price hikes, more than a third cited rising interest rates and low credit scores. Half of Americans were influenced by increasing home prices.
Median home prices in June were up by 11 percent from the previous year. Mortgage rates are up by 2.5 percent year over year.
Freddie Mac’s nationwide survey was conducted online from June 6 to 10 among a representative sample of 2,000 American consumers, aged 18 and older.