Jan 23, 2023 - Economy

Data shows the rent is (still) too damn high

Data: Moody's Analytics; Chart: Axios Visuals

The average American household is now considered "rent-burdened," with a record-high share of renters spending more than 30% of income on rent each month, according to Moody's Analytics.

Why it matters: This is a painful surge for many, coming at a time when inflation (while on the decline) has driven up the cost of food and energy.

  • "The average American household continues to be squeezed," said Thomas LaSalvia, Moody's Analytics director of economic research. "And it's having ramifications on quality of life."
  • Credit card debt is rising, spending is falling and there's been a shift in spending to more necessities rather than luxury-type purchases, he said.

Between the lines: The surge in home prices over the past few years helped push this number up.

  • Typical first-time homebuyers are priced out of the market, so they rent for longer. Now, even as house prices are falling, high mortgage rates are scaring people away from buying.

What's next: Rents are sticky. They aren't likely to climb much further, LaSalvia said, but don't expect them to fall much from where there are now.

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