If the first of the month sends chills of dread up your spine, you’re not alone.
A new report from the Joint Center for Housing Studies of Harvard University has found that in 2022, a historic half of U.S. renters were forced to put 30% of their earnings toward rent and utilities. Nearly half of those people were severely cost-burdened, paying more than 50% of their take home pay.
“We actually saw increases across every single income category that we look at, which sort of surprised us,” says Whitney Airgood-Obrycki, a senior research associate with the center and the report’s lead author per NPR.
A 2022 Redfin report stated that listed rents across the country for available increased 15% from 2021, with the average rent price being above $2,000 a month. For example, rents in cities like Austin, Seattle, and Cincinnati is up by 30%. The median asking price for rent in Los Angeles is $3,400.
The report suggests that the rising cost of living is correlative to the increased homelessness rates in the U.S., which hit a record high in 2022.
“We simply don’t have enough homes that people can afford,” says Jeff Olivet, executive director of the U.S. Interagency Council on Homelessness. “And when you combine rapidly rising rent — that it just costs more per month for people to get into a place and keep a place — you get this vicious game of musical chairs.”
Fortunately, there are some steps you can consider to help cut some costs if you’re facing unaffordable rent prices.
Use your cash-back credit for your next rent payment
Cards like the Bank Of America Cash Back card or the Bilt Mastercard offers you cash rewards when paying bills like your rent or utilities. This is a great way to get more bang for your bucks while taking of those sometimes burdensome responsibilities. However, be sure to properly budget so that you can still afford to pay at least 70% of your credit card bill by the end of the month to avoid incurring debt.
Speak with your leasing office about a security deposit alternative
Security deposits are commonplace with most rental processes to pay for repairs the building needs to perform if there’s damage upon your exit.Understandable, but they can be pricey. On average, a security deposit is equivalent to one month’s rent in addition to move-in fees, and an application fee among other costs.
But have you ever thought about negotiating with your landlord on this? In some instances, security deposits alternative like Door Loop, Lemonade or Rhino allows you to pay a low monthly fee as opposed to a lump sum upfront.