How to cope when rents are high
One thing you can do is create a budget for yourself and try to identify areas you can cut back on. You can use one of several budgeting apps available to make this process easier.
Housing may not be one that immediately comes to mind. But if you live in a walkable area, it may be possible to get by without a car and rely on buses and the occasional rideshare.
AAA puts the average cost of owning and operating a new car at $1,024.71 per month. But even used vehicles can be expensive to own and maintain. So if you're able to unload that expense, it could help.
You can also look into getting a side job to boost your income. However, if you're 32 with two kids, your children may be on the young side. And that means childcare costs could eat into your side hustle profits. So you may want to focus on opportunities you can do from home, like data entry.
You can also see if your state has a rental assistance program you can apply for. You may, for example, be eligible for subsidized housing. Contact your local public housing agency to find out more.
Finally, do some research to see if moving to a different neighborhood results in lower rent prices. If you have children in school, moving may not be easy, as it could mean having to switch districts. But if you’re struggling to keep up with your bills, it may be your only choice for the time being until your income increases or other costs of yours start to go down.
Once you feel like you're covering your basic costs, focus on building an emergency fund that will protect you from taking on debt in the future.
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Learn moreWhy so many Americans are rent-burdened
An estimated 21 million renter households in the U.S. are cost-burdened, says the U.S. Census, meaning they spend more than 30% of their income on rent. That represents nearly 50% of all renter households based on 2023 data.
Rents soared after the pandemic, and the reason largely boils down to limited supply and high demand. According to Zillow, the U.S housing shortage grew to 4.5 million homes in 2022, up from 4.3 million the year before. "This balance reached a tipping point when the Great Recession ushered in a decade of underbuilding and millennials — the biggest generation in U.S. history — reaching the prime age for first-time home buying. The result has been worsening affordability, now exacerbated by stubbornly high mortgage rates," it said in a press release.
The National Low Income Housing Coalition recently said the U.S. has a shortage of 7.1 million affordable housing units. Only 35 affordable and available rental homes exist per 100 extremely low-income renter households.
The good news is rents have been gradually decreasing over the past year and a half. The bad news? This makes multifamily housing less appealing to investors, according to Realtor.com, which could result in lower rental unit inventory going forward and, in turn, cause rent prices to go up.
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