The cost burden for renters in the United States is the heaviest in five years, a new report says, and it’s stressing the household budgets of many residents in Modesto.
More than half of the households in Modesto that rent a home or apartment are spending more than 30 percent of gross income on housing, according to the Apartment List study, which cited the most recent Census data from the American Community Survey. Maintaining housing costs at 30 percent of income or less is recommended for a household budget.
The percentage of renters in Modesto who pay more than 30 percent of household income for rental housing rose from 49.9 percent in 2017 to 52.4 percent last year. The city ranks 25th among the largest metro areas in the U.S. for households overburdened by rental costs. The average monthly rent is $1,220 in Modesto.
The study said 28 percent of renters in Modesto are severely cost-burdened, meaning at least half their income is spent on housing.
Nationwide, the number and percentage of families that struggled with rent rose for the first time since 2014. The national rate is now 49.7 percent.
In 2018, almost 300,000 more households were stressed by rental costs than in the previous year, and almost 25 percent of those households were severely burdened with rental costs.
Miami has the highest percentage of cost-burdened renters (62.7 percent) and Riverside in Southern California is second in the nation.
Household budgets are impacted by skyrocketing rental costs in a time of low unemployment and wage growth. Last year, however, housing costs grew faster than the checking accounts of renters for the first time in seven years, the study said.
Residents paying median rent were giving more than 30 percent of their income to landlords in 19 of the 25 largest cities in the country.
High rents are not a great problem for people earning high incomes in a few cities. For example, average renters in San Francisco paying the median rent were not struggling to make ends meet, the study said.
In California, Gov. Gavin Newsom signed a rent stabilization bill this week capping rent increases at 5 percent per year, though the bill does not apply to all types of housing.