A record high number of American renters — about 21.3 million — are devoting 30 percent or more of their income to paying rent, according to the annual State of the Nation’s Housing report from Harvard University’s Joint Center for Housing Studies. Most financial experts say consumers shouldn’t pay more than 30 percent of their monthly income for housing costs.
Rents, however, have been rising faster than wages for years now. “When you have to dedicate such a high proportion of your income to rent every month, it forces you to make difficult decisions,” says Dan McCue, a senior research associate at Harvard’s Joint Center. “It means spending less on essentials like food, clothing, and health care, as well as less opportunity to save for a down payment on a home or plan for retirement.”
Source: Harvard University’s Joint Center for Housing Studies and “11 Million Americans Spend Half Their Income on Rent,” CNNMoney (June 22, 2016)