The national rent-to-income (RTI) ratio has been falling for five quarters, dropping to 27.6% in the fourth quarter of 2024, according to Lu Chen and Mary Le at Moody’s. This share was most recently seen during the pandemic, but before that jarring event, a level that would have been common in 2014.
Housing affordability has become a widespread problem in the U.S. Millions of households, whether owning or renting, spend more than 30% of their income on shelter and are considered financially burdened.
The current drop in RTI is the result of higher house inventory and wages, Moody’s said. Currently, year-over-year income growth is 3.6%. Compared with three months prior, Q4 median household income rose by 0.9%, passing the typical 0.2% quarterly increase in asking rents. Rent growth year-over-year was 0.7%. Should the trends continue, that would further lower the rent burden.
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