The median cost to rent a one-bedroom apartment is climbing in many parts of the country. That's a scary prospect for the Americans who are still financially recovering from the pandemic.
In fact, 2 in 5 renters say their housing budget is already stretched to the max and they wouldn't be able to handle a $150 monthly rent increase, according to a new survey from Rent.com. Researchers at the site polled 1,200 people, ages 18 to 70, to understand how the Covid crisis changed their finances and how it could affect their ability to afford the area where they live.
"Rent prices in this country are absurd and wages have stagnated for over a decade," says Carter Seuthe, the chief executive officer of Credit Summit. With housing costs going up and other outside expenses piling on, "most people can't really afford to live where they're living."
Other than a rent hike, Americans' biggest fear is losing their housing altogether. Almost half of the renters in Rent.com's survey, 48%, were behind on payments in June. And for a majority, 68%, the thought of having to leave their apartment has led to anxiety and taken a toll on their mental health.
Almost 7% of the respondents in Rent.com's survey were already evicted due to falling behind during the pandemic: Despite eviction moratoriums, "it is clear that these breaks were far from universal," researchers wrote.
There are other indicators an eviction crisis is brewing: In a U.S. Census Bureau poll of roughly 7.4 million adult renters, more than 3 million said it's "likely" they'll be gone in two months.
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Adding to the difficulty, many people are juggling other expenses, including student debt and medical bills. Among the Rent.com poll takers who've ever had to choose between rent and other essentials, 50% chose food, nearly 40% paid for a medical bill instead, and over 36% bought household needs.
To prepare for unexpected expenses that could affect your ability to make rent, build an emergency fund or add to the one you have, says Jorge Padilla, a certified financial planner and senior client advisor at The Lubitz Financial Group in Miami: "Be disciplined about [putting] 10% to 25% of your income toward a saving account," he says. Aim for a reserve fund to cover at least 3 to 6 months' worth of expenses.
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Being prepared for an emergency should be "top of mind," adds realtor Jason Gelios of Community Choice Realty.
"This could be setting an extra amount of money toward an emergency fund or finding ways to increase your income or decrease your monthly obligations," he says. "Knowing that an emergency can happen again will put tenants in a better position."
Some Rent.com respondents solved their rising-rent problems by doubling with a roommate to reduce their share. Others sold belongings, borrowed money from someone they knew, or talked about it with their landlord.
The latter might be an especially smart move, experts say. Some property managers may be willing to negotiate partial payments or agree to a temporarily reduced payment plan.
Whatever you do, don't let your situation become unstable. Seek out rental assistance from local nonprofits and charities. Your state government could also lend a hand if you qualify.
"Tenants should know that many programs offer assistance, and they should not fear their landlord," Gelios says. "Open communication will go a long way and provide a better solution to those in need."
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