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With economists expecting another frothy core-CPI print north of 2% when the BLS releases its September update on consumer prices later this week, shelters costs - and particularly rent - are expected to be a major contributor to these gains (particularly since the price impact from the Trump administration tariffs hasn't materialized yet). As we pointed out over the weekend, home prices, according to at least one study, have reached peak unaffordability, as a lack of supply (and already exorbitant household debt) inflates prices and constrains consumers' ability to buy.

Renters

As more members of the middle class have chosen to rent instead of becoming homeowners, the average national rent has soared, with housing costs rising across the US, particularly in costly urban markets clustered along the coasts. One consequence of this renting boom is that households that rent have become increasingly burdened by these higher costs. And in a report published this week, Apartment List analyzed publicly available Census data to determine how the cost burden of rents has shifted over the past decade.

What it found is that, while the percentage of US renters who qualify as "cost burdened" - ie those who spend more than 30% of their total income on rent - has ticked lower since peaking in 2014 (it currently stands at 49.5%), a trend that was largely the result of higher-income professionals choosing to rent instead of buy, the total number of cost-burdened renters has increased by more than 3 million since 2007. 

Renters

Despite this meager improvement, roughly half of US renters are spending more than 30% of their income on housing costs, while nearly one in four are spending more than half their income on rent.

Renters

Renters' median income increased more quickly than the median rent last year for the sixth year running. But just like with the drop in the percentage of "cost-burdened" renters, Apartment List found that this improvement was primarily driven by an influx of more affluent renters. Those toward the lower end of the income spectrum continued to struggle.

Cost

While poorer consumers in markets like New York City have been especially squeezed by rising rents driven by the uninterrupted upward trajectory in home prices since the crisis, the median renter qualifies for cost-burdened status in 20 of the 25 largest metro areas.

Renters

And nearly one in three cost burdened renters lives in California, New York, or Florida (interestingly, Florida has the highest percentage of cost-burdened renters, with Miami among the worst cities for rental affordability relative to income).

Five

Apartment List also charted the relationship between housing affordability and renter incomes in the largest metro areas.

Renters

The shortage of affordable housing in areas of economic opportunity remains one of the most pressing economic struggles facing US renters. And while signs of softness are beginning to emerge in the housing market (evidenced by a slump in home sales data) many middle-class renters, burdened as they are by an aggregate $1.5 trillion in student loans, one constituent of the record household debt burden facing Americans, are already drowning in debt, and unwilling - or unable - to take out a mortgage, particularly in an environment where interest rates are expected to rise.