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The median housing costs for renters and homeowners in the U.S. increased last year, with over 21 million renter households spending more than 30% of their income on housing expenses. While the overall share of income towards housing remained the same, the burden varied by race.
In 2023, rental costs rose by 3.8% and home values by 1.8%. The data from the 2023 American Community Survey showed that the increase in real rental costs outpaced the rise in home values for the first time in a decade. Renters, especially in Black or African American households, faced higher housing cost burdens compared to other racial groups.
The Federal Reserve’s decision to raise Interest rates to combat Inflation affected mortgage rates and the housing market, leading to a surge in rental costs. Despite the challenges, the economy saw growth post-pandemic, with job growth and higher household income in 2023. Inflation had eased by December, but housing expenses continued to be a significant factor contributing to overall Inflation levels.
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SOURCE
Emma Collins, graduated in Financial Economics from the University of Chicago in the USA in 2016. She has since worked at an asset management firm in New York, where she specializes in investment strategies and portfolio management. Emma has a keen interest in financial analysis and has published several articles in renowned financial journals. Her work focuses on providing actionable insights to investors, and she is known for her forward-thinking approach to managing financial portfolios.
