Millions are now living ‘rent-burdened’ for the first time — in these 3 states, you can expect to spend over 30% of your income on rent. Here’s how to get a handle on housing costs | Moneywise
In today’s housing market, the traditional 30% rule, which advises that housing costs should not exceed 30% of your household income, has become increasingly difficult to follow for renters in the United States. Moody’s Analytics has labeled this phenomenon a “rent burden,” as more Americans find themselves spending a significant portion, or even more than 30%, of their income on rent. This financial strain has been exacerbated by high mortgage rates, discouraging potential homebuyers and leading to a shortage of rental units, which, in turn, prompts landlords to raise prices.
States like Massachusetts, Florida, and New York are experiencing some of the highest rent-to-income ratios, with residents spending around one-third of their earnings on rent. This situation is driven by supply and demand dynamics, as fewer homes become available, and interest rates make homeownership less affordable. As a result, many renters are stuck in a challenging financial position.
To cope with these challenges, some renters are negotiating with their landlords to forestall rent increases or are finding alternative, more affordable accommodations. This may include temporarily moving back in with family to save money for future housing costs. Additionally, renters can consider purchasing renters insurance to protect their belongings and create a safety net for emergencies.
Other strategies include subletting unused storage space or parking spots, leveraging rewards credit cards for financial benefits, and paying off high-interest debts to improve financial stability.
In the face of soaring rents and housing market constraints, adopting a wealth-building mindset and focusing on aspects within one’s control, such as budgeting and creating passive income, can provide hope and financial stability………
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Rising Dough
Given the challenges posed by rising rents and housing costs, how can individuals, especially those in the early stages of their careers or education, take control of their finances and build a secure future while navigating the current housing market and economic conditions?
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They might have to think about downsizing or finding more ways to gain a better income. 30 percent is alot considering you have to take care of yourself and the other expenses that comes with owning stuff. Also considering having a roommate or someone to share the rent with could allow you both to pay less on rent but sacrificing the the amount of space you have in you home. Having another person making money could allow you save more of your money and prevent you from living paycheck to paycheck until your career allows you to earn more.
Younger people can preserve money and not spend on wants, they can also make spending plans that can help build their capital and credit.
The younger people could start off by putting their wants to the side and bettering their future lives along with putting money up to better their credit and have them set for future references.
to take control of your finances to secure your future in these high prices would be to save up and to not spend as much as you used to. If you spent money on things you want like fast food, buying jewelry, spa, etc those things are things that you don’t need. Saving that money that you spent for those things can be excess money saved for when you most need it. This helps especially if you’re still in the beginning of your career or for education.
They might have to think about downsizing or finding more ways to gain a better income. 30 percent is alot considering you have to take care of yourself and the other expenses that comes with owning stuff. Also considering having a roommate or someone to share the rent with could allow you both to pay less on rent but sacrificing the the amount of space you have in you home.