Millions of Americans are spending half their paychecks on rent

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Many Use Half of Paycheck to Pay Rent

With home prices rising and many people under 65 shying away from buying a home, renters are finding themselves spending more on that monthly payment than ever before.

The recently released annual State of the Nation's Housing Report from the Joint Center for Housing Studies of Harvard University found the number of renters devoting at least half of their individual income to rent hit a shocking all-time high in 2014 — 11.4 million. And 21.3 million people spent 30% or more of their paycheck on covering rent that year, another number at an all-time high. (Experts recommend you spend 30% or less of your monthly income on this expenditure.)

The report crunches numbers from a variety of sources, including the U.S. Census Bureau, Bureau of Labor Statistics, Consumer Price Indexes and Housing Vacancy surveys.

With the median asking rent for a "newly constructed market-rate multifamily unit built in 2015," as the report describes it, reaching $1,381 per month, it's no wonder so many Americans are forgoing a home purchase.

Meanwhile, those who do want to get out of the rental cycle face significant setbacks.

RELATED: The 10 best big cities to buy a home instead of renting

10 best big cities in the US to buy a home instead of rent
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10 best big cities in the US to buy a home instead of rent

Tampa, Florida

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Charlotte, North Carolina

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Atlanta, Georgia

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Miami, Florida

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Baltimore, Maryland

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Austin, Texas

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St. Louis, Missouri

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Dallas, Texas

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Philadelphia, Pennsylvania

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Detroit, Michigan

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The report notes that down payments remain a challenge, as for many renters, the median value of all financial assets was just $3,000 in 2013, while a 5% downpayment on a median-priced existing home in 2015 cost $11,100. With low-income households becoming more common (defined as those with net wealth of $1,000 or less), the report adds, securing enough for a downpayment is merely a pipe dream.

Additionally, the report says the outstanding student loan service balance jumped from $10,500 in 2001 to $17,000 in 2013.

With these factors in mind, it's no surprise the report says the national homeownership rate dropped by more than 5 percentage points, from 69% in 2004 to 63.7% in 2015.

Whether you're looking to purchase a home now or in a few years, it's a good idea to know your credit scores. Applicants with a good credit score may qualify for better mortgage terms. (You can use this calculator to see how much house you can afford here.) You can view your two free credit scores, updated each month, on to see how your credit currently fares.

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