Cost-Burdened

Homeowners and renters alike are facing affordability issues, according to a survey from Freddie Mac, with renters hit particularly hard. The GSE’s “Profile of Today’s Renter and Owner” study showed that over half of Americans are making spending or housing changes to afford their monthly housing payment. Additionally, 44% of renters and 35% of owners who had trouble affording their housing payment over the last two years reported having to move to afford housing costs. Still, the majority of both renters and homeowners believe their current situation is the most affordable option for them. Renters are the most likely to be cost-burdened.

According to the survey, 34% of renters spend more than one-third of their income on rent, while only 25% of homeowners spend that much on their housing payment. The biggest obstacle preventing many renters from becoming homeowners, specifically low-income renters, is the down payment and closing costs. Around 88% of low-income renters said the down payment and closing costs would be their biggest hurdle, compared to 72% of middle-income renters. Many Americans have had to cut costs to afford housing, including 62% of renters and 47% of homeowners. Over half of renters, 55%, reduced spending on non-essential items such as entertainment, compared to 52% of owners.

Source: Freddie Mac