More Americans Are Becoming Homeless Due to Nationwide Rent Increases

Photo courtesy of Business Insider/Rental MarketPhoto byBusiness Insider

A growing number of Americans are ending up homeless as soaring rents in recent years squeeze their budgets. Per a report from Harvard's Joint Center for Housing Studies, roughly 653,000 people reported experiencing homelessness in January of 2023, up roughly 12% from the same time a year prior and 48% from 2015. That marks the largest single-year increase in the country's unhoused population on record, Harvard researchers said.

Homelessness is a problem in states such as California and Washington, which has also increased in historically more affordable parts of the U.S. Arizona, Ohio, Tennessee, and Texas have seen the largest growths in their unsheltered populations due to rising local housing costs. The American people are struggling to keep a roof over their heads due to inflation in 2021 and 2022 and a surging rental market across the U.S. outpaced worker salaries.

There are several factors that can cause homelessness, high rents and the expiration of pandemic relief last year contributed to the spike in housing insecurity, per researchers found. There has also been a rising trend of tech companies, and financial institutions laying off workers. "In the first years of the pandemic, renter protections, income supports, and housing assistance helped decrease a considerable rise in homelessness. These protections ended in 2022, at a time when rents were rising rapidly and increasing numbers of migrants were prohibited from working. Currently, the number of people experiencing homelessness jumped to 71,000 in just one year," according to a recent report from the United States Census.

Rent in the U.S. has steadily climbed since 2001. In analyzing Census and real estate data, Harvard researchers found that half of all U.S. households across income levels spent between 30% and 50% of their monthly pay on housing in 2022, this can be classified as a “cost-burdened." Some 12 million tenants across the United States were severely cost-burdened that year, meaning they spent more than half their monthly pay on rent and utilities, this is currently up by 14% from pre-pandemic levels.

The Joint Center for Housing Studies said, “People earning between $45,000 and $74,999 per year took the biggest hit from rising rents on average, 41% of their paycheck went toward rent and utilities.” Tenants should generally allocate no more than 30% of their income toward rent, according to the U.S. Department of Housing and Urban Development. So if the U.S. Department of Housing and Urban Development said we should only allocate 30% of our income towards rent, why are landlords/ property management companies increasing rents above the 30% mark?

The current rental market is showing signs of decreasing the monthly rent. The median rent in the U.S. was $1,964 in December 2023, up 23% from before the pandemic, according to online housing marketplace Rent. Could this be a sign of relief for millions of renters in the United States?

Here is your opportunity to voice your opinion.

1. Do you think the cost of monthly rent is decreasing?

2. Why do you think the Rental Market increased the monthly rent by 25% or more in the first place?