More Americans Struggling to Pay the Rent
As the portion of Americans renting rather than owning their homes has grown in recent years, so has the number of Americans for whom the monthly rent check has become a burden.
In 2013, almost half of all renters were spending more than 30 percent of their income on housing, with more than a quarter paying half their income to their landlord, according the "State of the Nation’s Housing 2015" report issued today by the Harvard Joint Center for Housing Studies.
Rising rents aren’t just impacting low-income consumers. One in five renters earning $45,000-$75,000 is paying at least a third of their income in rent.
Related: There’s Only One Way Rents Will Go: Sky High
The increase in rental rates represents a byproduct of the falling home ownership rate, which dropped to 63.7 percent in the first quarter of this year, the lowest level since 1989. The rate has fallen for the past eight years and appears poised to continue its decline.
That puts the 2010s on pace to be the strongest decade for rental growth in history, and the national vacancy rate fell to just 7.6 percent, its lowest level in 20 years, according to the Harvard report. The trend reflects increased demand from millennials, as well as a growing preference for renting in households aged 45-64 and higher-income households.
Rents rose 3.2 percent last year, twice the rate of overall inflation, spurring builders to begin construction on more multi-family units than in any years since 1989. “And if job growth continues to pick up, we could see even more demand, as young adults move out of their parents’ homes and into their own apartments,” Joint Center senior research associate Daniel McCue said in a statement.
Small Business Owners Say They’re Raising Worker Pay
A record percentage of small business owners say they are raising pay for their workers, according to the latest monthly jobs report from the National Federation of Independent Business, based on a survey of 10,000 of the group’s members. A seasonally adjusted net 35 percent of small businesses say they are increasing compensation. “They are increasing compensation at record levels and are continuing to hire,” NFIB President and CEO Juanita Duggan said in a statement accompanying the report. “Post tax reform, concerns about taxes and regulations are taking a backseat to their worries over filling open positions and finding qualified candidates.”
The US Is Running Short on More Than 200 Drugs
The U.S. is officially running short on 202 drugs, including some medical staples like epinephrine, morphine and saline solution. “The medications most vulnerable to running short have a few things in common: They are generic, high-volume, and low-margin for their makers—not the cutting-edge specialty drugs that pad pharmaceutical companies’ bottom lines,” Fortune’s Erika Fry reports. “Companies have little incentive to make the workhorse drugs we use most.” And much of the problem — “The situation is an emergency waiting to be a disaster,” one pharmacist says — can be tied to one company: Pfizer. Read the full story here.
Chart of the Day: Could You Handle a Sudden $400 Expense?
More Americans say they are living comfortably or at least “doing okay” financially, according to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2017. At the same time, four in 10 adults say that, if faced with an unexpected expense of $400, they would not be able to cover it or would cover it by selling something or borrowing money. That represents an improvement from 2013, when half of all adults said they would have trouble handling such an expense, but suggests that many Americans are still close to the edge when it comes to their personal finances.
Kevin Brady Introduces Welfare Reform Bill
The Tax Policy Center’s Daily Deduction reports that Rep. Kevin Brady (R-TX), chair of the House Ways and Means Committee on Friday introduced The Jobs and Opportunity with Benefits and Services (JOBS) for Success Act (H.R. 5861). “The bill would rename the Temporary Assistance for Needy Families (TANF) program and target benefits to the lowest-income households. Although the House GOP leadership promised to include an expansion of the Earned Income Tax Credit as part of an upcoming welfare reform bill, this measure does not appear to include any EITC provisions.” The committee will mark up the bill on Wednesday.