While some renters may believe they are able to save more money than those individuals who have purchased property, a recently released report may prove otherwise.
The Center for Housing Policy's (CHP) latest annual summary on residential conditions, Housing Landscape 2013, detailed a rise in severe housing cost burdens among working renter households, for the third straight year. According to the organization's report, which contains American Community Survey data from the year 2011, more than 26 percent of working renters said they spent more than half of their household's total income on housing costs in recent years.
Despite mortgage records showing low rates, home prices exhibiting declines and severe housing cost burdens remaining relatively stable between 2008 and 2011, a reported one in five working homeowners experienced substantial housing affordability challenges during the period. Additionally, rising rental housing costs and falling incomes may have led an increasing number of working renter households to record hikes in severe housing cost burdens during the three-year period. Nationwide, residential expenses for working renters rose 6 percent, while household incomes dropped more than 3 percent.
"The growing rate of severe housing cost burdens among renters is not a new trend, but it is clearly an unsustainable one," said CHP lead report author Janet Viveiros. "While rental costs have steadily risen over the last few years, wages for these working families have not fully recovered from the hit they took between 2008 and 2009. Spending most of your paycheck on rent means cutting back on other necessities, including healthcare and even food."
Positive economic indicators found in unemployment figures
Although many American consumers may have reported decreases in personal income levels and issues with employment during the years between 2008 and 2011, data recently released by the government show considerable increases during the month of April.
The U.S. Department of Labor noted in its latest Employment Situation Summary that total nonfarm payroll employment moved up by 165,000 last month. While the national unemployment rate held firm at 7.5 percent in April, the overall number has fallen 0.4 percent since January alone. A total of 11.7 million persons are still unemployed, however, the amount has declined by 673,000 since the first month of 2013.
In addition, employment opportunities last month reportedly increased in industries such as health care, professional and business services, retail trade and food services and drinking places.
Due to the recent improvements, more consumers may be able to afford their regular mortgage payments, enabling many to avoid repossession and allowing housing markets to register fewer foreclosed houses.