Inflation, rising rents and high interest rates have made monthly housing costs a greater burden. But a new survey commissioned by real estate broker Redfin highlights the significant financial challenges faced by people earning less than $50,000 annually.
According to the survey, nearly three-quarters of individuals in this income bracket struggle to afford their regular mortgage or rent payments. This financial strain has led many to make difficult sacrifices to meet their housing costs.
Among those surveyed, nearly one-quarter (24%) reported skipping meals as a way to meet their monthly housing expenses. This sacrifice is one of the most common, alongside eating out less frequently (43%), taking fewer vacations (36%), and borrowing money from family or friends (25%).
Additionally, 23% of respondents have sold belongings to cover housing payments while 21% have delayed or skipped medical treatments and 15% have taken on side jobs.
The survey underscores the broader issue of rising housing costs, which have outpaced wage growth over the past five years. Although U.S. rents have stabilized somewhat in the past year, they remain about 20% higher than pre-pandemic levels. The availability of affordable apartments has dwindled, with fewer options available for under $1,000 per month. Homeownership is even more challenging, as median housing costs have surged over 40% since before the pandemic. A household now needs to earn $77,000 annually to afford a median-priced starter home.
Challenges facing Gen Z
The survey also shows the unique housing challenges faced by Generation Z. This generation typically earns less than older generations and faces a tougher financial landscape than their parents did at the same age.
About 71% of adult Gen Zers report struggling to afford their housing payments, the highest percentage among all generations. Of those, nearly a quarter have sold belongings to make ends meet, and 21% have skipped meals. Some have even moved in with a partner or delayed having children.
Millennials are not far behind, with 65% struggling to pay for housing. Among them, 23% have skipped meals, 21% have delayed medical treatments, 19% have worked side jobs, and 13% have tapped into retirement savings.
The issue of housing affordability was a significant concern during the recent election. A separate Redfin survey found that 38% of voters said housing costs influenced their presidential choice, and 40% said it affected their local voting decisions.