Research Reveals how High Rent is Eating Away Savings of More Than 50% of American Tenants

Research Reveals how High Rent is Eating Away Savings of More Than 50% of American Tenants
Cover Image Source: Americans are saving little after paying rents (representative image) | Unsplash | Photo by Igor Omilaev

Americans are exasperated with the rising cost of living in the United States and are saving less percentage of their income since they have to cover everyday bills and healthcare with their low wages. According to a recent survey, even if you make up to $150,000, you may still be classified as "lower-middle class" in some locations. The research discovered that in places such as Northern California and Virginia, you would have to earn somewhere between $128,964 and $152,652 to not be considered "lower-middle class." As per the latest report released by the Joint Center for Housing Studies of Harvard University, in 2022, almost half of the renters were disbursing 30% of their paychecks on housing rents. More than 12 million Americans are cost-burdened and exhausting their salaries on the necessary expenses, via CBC. From 2019 to 2022, the share of cost-burdened renters increased by 3.2 percentage points.



 

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RentCafe, an apartment listing service, revealed findings of a study that showed how residents of Manhattan in New York have been spending exorbitant amounts on housing rents as compared to their peers in other Americans. Researchers took the help of the income-to-rent ratio and calculated for each city based on how much they are spending as compared to how much they are earning. They also looked at the remaining income (after rent) to check whether the amount could cover the monthly expenses such as grocery, healthcare, utility bills, transportation, and other expenses. This demonstrated actual results and it was shocking to see that most Americans are not saving even a small percentage of their monthly income.



 

 

They came to the conclusion that Americans do not have much money left after paying for rent and vital expenses. The study was done in 189 different cities in the United States, with Manhattan and Brooklyn topping the list. This means that residents of Manhattan and Brooklyn were spending the majority share of their income on just rent, with a minimum amount left to satisfy their expenses, let alone savings. Going further, Boston and Auburn, Alabama were found facing unacceptable conditions where they did not have enough money left to fulfill even their basic requirements. Auburn, Alabama ranks worse when it comes to spending on utility, food, and healthcare. 



 

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Cities in the United States have always been demeaned for their high rent costs but some cities offer people a decent lifestyle. One of them is Silicon Valley’s Sunnyvale in California which is considered one of the best cities in the US as renters there can afford expenses outside rent due to the higher wages. After Sunnyvale, Americans are seen living in Surprise, Arizona followed by Arlington, Virginia. As per the study results, it has been noted that the majority of cities in the southeastern part of the country are considered much more affordable than the others. Surprisingly, 9 of the cities are listed in the top 30 cities list where people can take out a major proportion of their income after fulfilling their needs.

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