A new report from Apartment List reveals that more than half of Austin renters are “cost-burdened,” meaning they spend more than 30 percent of their income on rent.
Apartment List analyzed U.S. Census data from 2007-2014 and found that a whopping 50.1 percent of Austin renters were cost-burdened in 2014. The median monthly rent was $1,084, while median monthly renter income was $3,498. That burden increased from 49 percent in 2007 when the local median renter income was $2,746 per month and the median monthly rent ran $829.
In other grim news, the report shows that almost half of Austin’s cost-burdened renters are severely burdened, meaning they spend more than 50 percent of their income on rent.
While the burden has gotten heavier, Apartment List notes that Austin has fared better than other cities, as our median income has also increased over time. The national average of cost-burdened renters was 51.8 percent burden in 2014.
The report warns that any cost burden — especially a severe one — can hinder renters from transitioning to homeownership and preparing for the future. “Most personal finance experts recommend allocating 20-30 percent of income for rent, around 5 percent on healthcare, and around 10 percent for savings; high rents are likely eating into funds that should be set aside for health emergencies, the down payment on a home, or a retirement fund.”
A recent study from Zillow echoes Apartment List’s warning. The listing website says that renters who spend more than 30 percent of their income on rent make major cuts in other important areas like savings, healthcare, and retirement plans.
Written by: Nicole Raney at Culturemap Austin