More renters are paying their rent on time, but many are falling behind on other bills and cutting spending to make ends meet.
Plans to buy a home have dropped sharply, with the share of renters expecting to take out a mortgage within six months falling from about 15% to 6.4% in one year.
The biggest decline in homebuying intentions occurred among younger adults, parents, higher-income renters, and stock owners.
Struggling to pay the rent each month is a common challenge, and lately it seems to be getting harder. New research from the Federal Reserve Bank of Philadelphia found that more Americans who rent their homes are managing to pay their rent on time, but many are doing so by sacrificing other parts of their finances.
The report, based on the bank's Labor, Income, Finances, and Expectations (LIFE) Survey, found that while housing payment performance has improved over the past year, renters are increasingly skipping other bills, reducing spending and feeling less financially secure. At the same time, aspirations to become homeowners have fallen dramatically.
About one in five renters surveyed in January 2026 said they had been unable to pay their rent on time or in full during the previous three months. That's an improvement from roughly one-quarter of renters reporting payment difficulties in late 2024 and early 2025.
More than 50% are ‘rent burdened’
Concerns about eviction also declined, and fewer renters blamed missed payments on temporary cash shortages. However, about 12% continued to report financial problems they expected to persist.
The study estimates that 53.5% of renters remain "rent burdened," meaning they spend more than 30% of their gross income on housing.
Researchers found evidence that many renters are staying current on rent by making difficult financial tradeoffs elsewhere.
Reducing spending
Nearly two-thirds of respondents reported cutting back on spending over the previous year, including both discretionary and essential purchases. More than one-third said they had paid less than the full amount due—or skipped payments entirely—on debts or monthly bills such as credit cards, utilities or medical expenses. Those figures were higher than a year earlier, suggesting broader financial stress despite improvements in rent payments.
The financial strain appears to be affecting confidence as well. More renters reported feeling less financially secure than they did a year earlier, even as fewer struggled with rent payments.
Perhaps the most striking finding involved homeownership plans.
Only 6.4% of renters surveyed in January 2026 said they expected to take out a mortgage within the next six months, down sharply from around 15% in January 2025. The decline was especially pronounced among renters ages 18 to 35, households with children, renters who own stocks, and those with higher incomes.
The report suggests that while renters may have become more successful at prioritizing housing payments, persistent affordability challenges and broader financial pressures are making the transition to homeownership increasingly difficult.