A quarter of U.S. renters are spending more than half their income on rent, according to new data, driven by sharp increases in rental costs during the COVID-19 pandemic. Experts are calling for significant measures, such as increasing housing supply, to address the issue.

According to federal census data released on June 15, 25% of renters in 2023 spent over half their income on rent, a 3-percentage-point rise from 22% in 2019, before the pandemic. USA Today noted, “This 3% increase means millions of Americans are spending a significant portion of their paychecks on rent.”
The rising cost of rent is causing severe financial strain, particularly for middle- and lower-income households. After paying rent, many are forced to cut back on essentials like food and medicine, while travel or leisure activities are out of reach.

The upward trend in rents has continued post-pandemic. An analysis by USA Today of apartment listing data from 202 metropolitan areas found that, from January to May this year, 94% of major cities saw higher average monthly rents compared to the same period in 2019. The average rent increase was 31%.
USA Today highlighted that the pandemic “reshuffled populations, locked down cities, and prompted remote work,” fueling the surge in rental costs.

As of May, regions with the steepest rent increases included Manhattan, Kansas (14.3% year-over-year), Abilene, Texas (7.3%), Grand Forks, North Dakota-Minnesota (7.0%), Shreveport-Bossier, Louisiana (5.9%), Fresno, California (5.8%), and Harrisburg-Carlisle, Pennsylvania (5.8%).
However, some areas saw declines. In May, San Angelo, Texas, saw rents drop by 11.4% year-over-year, followed by Bozeman, Montana (-10.1%), LaGrange, Georgia-Alabama (-9.6%), Sherman-Denison, Texas (-8.4%), Punta Gorda, Florida (-7.0%), and Austin-Round Rock-Georgetown, Texas (-6.4%).

High rent costs remain a critical concern. Amid soaring inflation, including rising food and fuel prices, American households are feeling significant financial pressure. Housing costs, including rent, were a major issue in last year’s presidential election.
However, housing market experts predict that rents are unlikely to return to 2019 pre-pandemic levels. With 30-year mortgage rates remaining high and home prices trending upward, expecting rents to fall independently is unrealistic.

Rob Warnock, senior researcher at Apartment List, stated, “Given current housing prices, a reversal to pre-pandemic rent levels is impossible. A more realistic scenario is rent stabilization in areas where incomes are steadily rising.”

Experts emphasize that the only effective way to slow rent increases is to boost housing supply. For example, in Bozeman, Montana, where apartment construction has recently increased, rents dropped by 10.1% year-over-year in May, despite steady rental demand.
Casey Ross, an advisor at Sterling Commercial Real Estate Advisors, explained, “Many people quickly decided to move to places like Bozeman. With multiple apartment projects underway, vacancy rates are very low.”

By Reporter Park Hong-yong