Nearly 43 million U.S. households rented their homes in 2016, which is about 9.3 million more than in 2004.
And according to the Pew Research study American Families Face a Growing Rent Burden, 38% of these households are "rent burdened".
Pew defines rent burdened as any renter household that spends more than 30% of their income on rent. Being rent burdened means having less money for other expenses or savings.
The main cause of this is rents have been rising much faster than household income.
Between 2001 and 2015 median U.S. rents rose from $512 a month to $678, a 32 percent increase. Add in increases in utilities and other related costs and the increase is close to 50%.
Over the same time frame, household incomes were basically flat. The Pew chart below nicely illustrates these figures (click to enlarge).
In 2015 7 million of renter households were severely burdened, which is defined as spending more than half of their income on rent.
These households have little to no financial slack in their budgets, which means even minor financial shocks have a major impact.
But as the report chart below shows, even at moderate levels being rent burdened greatly reduces the ability to save and build wealth.
Being rent burdened certainly adds to economic uncertainty, which we consider one of the major social and economic trends impacting society.
We also see it as a driver of the growth of the gig economy, especially part-time gig work done to supplement income.
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