65% of renters can’t afford basic living costs after paying this amount – here’s why

Nearly two-thirds (65%) of working-age renters struggle to afford basic expenses after paying rent, according to the Joint Center for Housing Studies at Harvard University.

It’s not just low-wage workers who are suffering. The researchers found that after paying rent, even many middle-income full-time workers do not have enough to cover basic needs.

What is driving the crisis?

The main reason many renters struggle to make ends meet is because rents are rising faster than income. Median rent has been rising faster than the median income of renters for decades, a problem that is worsening over time.

Rents are rising because there is not enough affordable housing to meet demand. To make matters worse, the cost of other necessities is also rising, putting further pressure on budgets.

Those surveyed at Harvard paid an average of $18,230 a year in rent and $57,340 in other necessities, such as transportation, taxes, health care, food and child care. Combined, that’s comfortably higher than the nation’s average annual salary of $62,192.

Who is the most vulnerable?

The most affected are single-income families with low salaries, especially those who raise children alone and suffer from health problems. According to the study, families with incomes of less than $45,000 annually are most at risk.

The report also found that people living in rural or non-urban areas are hit hardest by the rental affordability crisis. While rent is lower in these places, wages and chances of finding a better-paying job are as well.

This contradicts the common view that rental affordability problems are worst in urban areas.

How do tenants deal?

When you only have $310 left over after rent each month — which is the average for renters who earn less than $30,000 — there’s no room for error. That’s not enough to cover the costs of food, transportation, health care, and child care even in the cheapest counties in America.

So renters make impossible choices: skip meals, ration medications, turn off the heat in the winter. Many people borrow money just to survive, burying themselves deeper into debt. Others fall behind on rent altogether.

When things are this bad, you won’t be able to save for emergencies, make a down payment to get out of the rental market, or contribute to a retirement plan.

Wider impacts of all

This isn’t just a problem for renters, it’s a drag on the entire economy. When many renters can’t cover basic expenses, they don’t spend at local businesses, don’t save for retirement, and don’t build the financial stability that supports long-term growth.

These are not people sitting on the sidelines. They are teachers, nurses, warehouse workers and office workers — many with college degrees — who keep cities and towns running. If they cannot afford to live where they work, everyone could see the consequences: longer commutes, labor shortages, and hollowed-out communities.