About 24% of renters in America say they can no longer afford their rent, study says

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FILE-A For Rent sign is posted outside a home. (Photo by Jeffrey Greenberg/Universal Images Group via Getty Images)

Rising housing costs have put people in a bind with securing an affordable home, but renters are also feeling the strain that comes with having adequate resources to manage a higher cost of living.

And this is affecting a segment of the U.S., with 24% of renters stating that they can’t afford their rent, based on a new Intuit Credit Karma report.

To gather data, the company conducted an online survey among 1,349 adults 18 years and older between Nov. 20-26, 2023.

According to the study, this issue was high among millennials (30%) and Gen Z (27%) respondents compared to 10% of respondents 69 years and older.

Approximately 38% of renters say they have to sacrifice necessities to pay their rent, including 41% of Gen Z and millennial respondents.

However, the study notes that rising rent costs are not only affecting younger generations. About 42% of Gen X and 25% of baby boomers said they are sacrificing needs to pay their rent.

And to better manage their money, some renters are re-assessing their living circumstances. The study finds that 19% of renters say they are moving in with their family or friends because they can’t afford rent. And this statistic was higher for Gen Z and millennials at 25%.

But for renters who can still cover their monthly rent, 21% say they can only do this with the assistance of their family compared to 31% of millennials and 25% of Gen Z respondents to this question.

Moreover, the high price of homes has also led to less optimism for some consumers to buy one. Per the report, nearly half of Americans (46%) believe they will never be able to afford a home. A portion of respondents not in the market for a home (49%) state that mortgage rates and inflation have made it impossible for them to buy today.

Separately, about 39% of people are waiting for mortgage rates to fall, while 34% are delaying their plans as they wait out a possible recession. But 29% of individuals not in the market for a home say they’re afraid to buy a home due to job security.

While this sentiment was notable among several respondents, some say they are willing to take the plunge to purchase a home because the prices for rent are skyrocketing.

The study finds that of the 24% of Americans in the market for a home, 59% say they are motivated to purchase a home since rent is so high. But 56% are unsure if they can afford as much home as they planned, while 48% don’t know if they can afford to buy a house.

Consumers in the hunt for a home (30%) say they’ll have to depend on money from their family to buy one, compared to 39% of millennials.

This story was reported from Washington, D.C.

Housing