Americans sacrifice necessities as housing affordability crisis worsens
Nearly half of American renters and homeowners (49.9%) report struggling to afford their housing payments, according to a new Redfin report. Many say they’ve made significant sacrifices to keep a roof over their heads.
The most common sacrifice was forgoing vacations, a choice made by over a third (34.5%) of those struggling with housing costs. However, the report highlights even more serious sacrifices.
Over one-third (34.5%) skipped vacations, while 22% skipped meals and 20.7% worked extra hours at their job. A similar share (20.6%) even sold belongings.
“Housing has become so financially burdensome in America that some families can no longer afford other essentials, including food and medical care, and have been forced to make major sacrifices, work overtime and ask others for money so they can cover their monthly costs,” said Redfin Economics research lead Chen Zhao.
The survey, conducted by Qualtrics in February 2024, found that 17.9% of those struggling to afford housing borrowed money from friends or family, and 17.6% dipped into their retirement savings. Over 15% (15.6%) also delayed or skipped medical treatments.
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Mortgage payments are near all-time highs due to high home prices and interest rates. The median home sale price is up about 5% from a year ago, and mortgage rates are hovering around 7%, close to the 23-year high of 8% reached in October.
The report noted that the typical household earns roughly $30,000 less than needed to afford a median-priced home. Rents are also rising, further contributing to the affordability crisis.
The strain is particularly acute for millennials, with 13.5% of those struggling with housing costs having dipped into retirement savings.
Baby boomers struggling with housing were most likely to dip into retirement funds (27.5%). White respondents were most likely to use retirement savings for housing costs (20.7%), followed by Asian/Pacific Islander respondents (14%), Hispanic/LatinX respondents (13.6%), and Black respondents (12.6%).
“Fortunately, the country’s leaders are starting to pay attention, and homebuyers may get a reprieve in June if the Federal Reserve cuts interest rates, which would bring down the cost of getting a mortgage,” Zhao said.
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