Harvard University’s Joint Center for Housing Studies released a new study of rental costs in the United States and found nearly half of renters in El Paso cost-burdened by their monthly rent.
The threshold established by the study set the bar at 30 percent of income. That means those cost-burdened by rent pay in excess of 30 percent of their income on housing.
Furthermore, 28 percent of renters in El Paso were found by the study to be severely cost-burdened. In other words, they pay in excess of half their income on rent.
Nearby Las Cruces features even worse numbers. There, 58 percent of renters are cost-burdened. 28 percent are severely cost-burdened.
In speaking with ABC7, an economics professor Tom Fullerton at University of Texas said, “When you have a large percentage of the population that is paying more than 30 percent in rent, that implies that those households are going to struggle to make the transition from renters to homeowners.”
The decrease in home-buyers across the nation comes as a direct result of rising rent costs. A dramatic shift away from low-rent units into higher-priced apartments accounts for shrinking nest eggs. Renters struggle to transition into home-ownership when they lack the funds for a down-payment.
Additionally, the burgeoning student debt crisis ensures a lot of would-be first-time home-buyers won’t enter the marketplace. Crippled with considerable student debt and student loan payments, many millennials fail to develop a strong savings plan.
Coupled with the cost of rent, the dream of owning a home remains beyond reach.
Furthermore, the issue exacerbates itself. With a massive renting population, often condensed within urban centers, scarcity drives rents higher.
Even those making $75,000 and more each year face similar hurdles. Over 10 million residents in the US within that income bracket rented in 2018. That’s up from 7.1 million in 2010.
As housing costs continue to rise, renters struggle to build wealth in an increasingly competitive rental market.