If you are feeling the pinch of higher rents, you’re not alone.
Nearly 60% of renters saw a rent increase during the past year, while just 38% said they saw their income increase, according to a study from Freddie Mac. And renters were less likely than all employed respondents to have gotten a raise. As a result, nearly 1 in 5 who experienced a rent increase said they are now “extremely likely” to miss a payment.
“The surge in rents that took place over the last 12 months has created even greater housing uncertainty for the most vulnerable renters,” said Kevin Palmer, head of Freddie Mac Multifamily. “Our survey shows that the national housing affordability crisis is worsening, and that inflation is a key driver.”
Of those who saw a rent increase, 15% said it was a hike of more than 10%.
Higher housing costs and inflation have altered the plans for many potential homebuyers as well, according to the study.
Nearly three-quarters of renter households who were planning to buy a home said they’ve become less likely to over the past year. Among those less likely to buy, half said it was because of high home prices, while 39% pointed to difficulty coming up with a down payment and 34% blamed increased interest rates.
While 48% of respondents said they have cut nonessential items like entertainment because of rising prices, 44% said they have put less money toward their savings.
The higher costs are translating into real pocketbook concerns for households.
A majority of survey respondents, 62%, said they were concerned about not being able to pay for their housing in the next year. An even greater share, 84%, said they are concerned about an economic recession and half are concerned about losing their job.
While 39% of respondents reported having enough money for the things they want to spend money on in addition to what they need, 41% said they live paycheck to paycheck with just enough money coming in to get by. Roughly 20% of people reported they sometimes don’t have enough money for basics like food and housing until the next payday.
Conducted in early June among a representative sample of 2,000 American consumers, the survey found that nearly all surveyed households were affected by higher prices during the prior year. Increases in the cost of groceries and household items impacted 66% of people in the survey. Among the other most cited areas for cost increases were transportation, eating out and utilities.