1 in 4 of renters cannot afford $400 emergency

(CNBC) Financial stress visits renters more than homeowners.

That’s the main takeaway from a new report by the Urban Institute, a nonpartisan think tank in Washington.

Rental costs are rising much faster than renters’ salaries. Between 1960 and 2016, the median income for a renter grew by just 5 percent. During the same period, the median rent ballooned by more than 60 percent, according to The Joint Center for Housing Studies of Harvard University. (Both figures account for inflation.)

To be sure, buying a house has also become harder for many Americans — to do so now costs four times the median household income. The homeownership rate fell to 63 percent in 2016 – the lowest rate in half a century.

More than one-quarter of U.S. renters in the survey were not confident they could cover a $400 emergency. Around 18 percent of homeowners reported low emergency savings.

Leave a Comment

You must be logged in to post a comment.

Pin It on Pinterest