The data shows that real median rental costs increased by 3.8% last year while real median home values rose by 1.8%, via data released as part of the American Community Survey. Meanwhile, the Census Bureau data itself shows that renter households spent 31.0% of their income on housing costs at the median last year. And that is unchanged from 2022.
The latter indicates that either renter household incomes were able to keep pace with the rent increase and/or higher-income households are the ones starting to become renters.
That said, the data finds that the split is very much varied by race. Within Black or African American renters, 56.2% paid more than 30% of their income on housing costs. That compares to 46.7% of white renter households. Meanwhile, Asian households were the least cost-burdened according to the data.
In tying this back to markets, the backdrop going into last year was that the Fed had raised interest rates and that sidelined home buyers. In turn, that is resulting in more people renting overall. And with inflation higher at the time, shelter costs also increased. And that particular line in the US CPI report has been a key detail to watch, at least up until recently.
But with the data above, it does suggest that perhaps households are able to keep pace with that at least.