It's often said that in today's economy, people are being forced to choose between paying rent or buying medicine and food.
A new survey of 3,625 U.S. adults by Apartments.com shows that this is more than just a theoretical proposition. This year, 47% of tenants are spending more than 40% of their income on rent. To cover it, 79% of tenants have cut back on doctor visits, credit card payments and other necessities.
There are other negative consequences as well: 45% of renters have reduced their savings. "These savings not only place financial stress on the renter but also threaten future financial security," the report stated. In addition, 41% of renters are buying fewer or lower-quality groceries, and 23% are delaying major milestones, such as starting a family or returning to school.
Both men and women face these challenges. However, women are often worse affected. Some 82% of women, compared to 76% of men have cut their spending to cover their rent. Women were also more likely to slash their spending on groceries (44% compared to 37%), pay off credit cards (44% vs 33%) or stop going out for eating or entertainment (58% vs 52%). High rents and a tough job market are combining to hold young adults back, the report commented.
There were also generational differences in how tenants responded. Gen Z and Millennials were more likely to delay or reduce their spending on travel, going out or building their savings.
Younger renters are more likely to change housing due to rising rents or housing problems. Saving money was the main motivation for 57% of Gen Z and 54% of Millennials to move or make changes to their rental within the next year. In contrast, 62% of Baby Boomers said they would remain in their apartments even if rent went up or standards declined.
Remarkably, 22% of Gen Z and 19% of Millennials expected to spend over 60% of their income on rent and utilities, compared to 18% of Gen X and 15% of Baby Boomers.
Nevertheless, there were some deal-breakers. Neighborhood safety topped the list, with 17% of survey respondents refusing to compromise on it. A pet-friendly policy was a must-have for another 17%. In addition, 16% of respondents would rather pay extra to live alone than accept a roommate.
According to the report, some cities see rent spikes more often than others. Atlanta headed the list, with the highest year-over-year rent change – a 6% increase to an average rent of $1,768 for a 765 square foot apartment. Austin ranked second with a 3.5% rent increase, followed by Baltimore (up 3.4%), Boston (up 1.9% to $3,718 for a 697-square-foot apartment), and Brookline, MA (up 1.6% to $3,350).
Some metros that saw rents fall included Washington, DC (down 8.2%), Tampa (down 7%), Somerville, MA (down 6.7%), Seattle (down 5.1%) and Scottsdale (down 4.5%).
"Today's apartment market is about making tough choices," the report noted. "Compromise and budgeting are just a couple of things renters must do to find a place that works for them."
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