Rent Has Gotten Too High For Many Americans

The 30% Rule

There’s a rule of thumb to spend no more than 30% of your income on housing costs. This rule was popularized in the 1960s, and has remained conventional wisdom since.

But in today’s high-cost, high-rate environment, it has become much harder to follow.

Rising Rent

A housing affordability crisis is raging across America, hurting buyers and renters alike. Between 2022 and 2023, the real median gross cost of renting increased 3.8%, while 1.8% for home values. Nearly half of the renting population — roughly 21 million Americans — are having difficulty meeting this mark, per a Census Bureau report.

The steadily rising cost of rent has disproportionately affected Black and Hispanic households, more than half of which spend a bigger chunk than 30% of their income on rent. For nearly a third of Black households, more than half of total earnings went to housing costs.

Bringing Down Costs

Real estate is local and while the 30% rule is hard to follow in expensive cities like San Francisco or New York City, there are many areas in the U.S. where it’s a more realistic benchmark. In several states, the average share of income allocated toward rent is actually declining, according to a July survey from Realtor.com.

Nevertheless, the rise of housing costs, particularly in minority communities, highlights a continued need for affordable solutions, which has become a key talking point in the upcoming U.S. presidential election. Both former President Donald Trump and Vice President Kamala Harris have proposed policy solutions to the housing affordability crisis, CNN reports.

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