Here is some additional analysis on a key reason Trump won the election.
Apartment List discusses the Number of Households in Economic Stress Over Rent.
As of 2023 – the most recent year of Census ACS data currently available – 22 million renter households are spending more than 30 percent of their income on rent. This represents an increase of 226 thousand compared to 2022, putting the number of rent-burdened households at an all-time high. That translates to 51.8 percent of all renter households in the U.S., virtually unchanged from last year. Of these, 11.2 million, or 26.4 percent of all renter households, are severely cost-burdened, spending more than half of their monthly gross income on rent.
The prevalence of rent burden has long been a significant issue, but data for recent years is especially troubling because it represents a reversal of modest progress that was made over the course of the 2010s. In the aftermath of the Great Financial Crisis, the renter cost burden rate hit a peak of 53.4 percent in 2011. But in the ensuing years, it gradually improved, eventually dipping to 48.4 percent in 2019.
However, this progress has since been reversed by the record-setting growth in rent prices that occurred in 2021 and 2022. Rent growth has since moderated, but the number of rent-burdened households is still on the rise. There are currently 2.1 million more cost-burdened renter households than there were in 2019. Even though the current rent burden rate is slightly lower than it was from 2010 to 2012, the number of renter households who are burdened by their housing costs has never been higher.
And in some ways, the cost burden rate could even be underestimating the degree to which housing affordability has worsened. A lack of affordability has deterred new household formation in recent years, as Americans are increasingly doubling up with family or roommates to save on housing costs. These individuals are struggling with housing affordability, but because they don’t represent their own households, they are not captured in cost burden statistics.
Additionally, as the affordability of for-sale housing has eroded even more rapidly than that of rentals, more prospective homebuyers are continuing to rent. This subset of renters who have been sidelined from the for-sale market tend to be higher-income, and their presence in the denominator of the renter cost-burden rate could be depressing that rate slightly.
Income vs Rent
To understand cost burden, it is important to look not just at rent prices, but also at how they compare to incomes. The chart above plots metro level median rent growth from 2019 to 2023 against renter income growth over the same period (both in nominal terms). Each marker represents one of the nation’s 100 largest metros, sized by population, and shaded based on the change in the metro’s cost burden rate during those same years, with red indicating worsening cost burden and green signaling improvement. In metros sitting above the diagonal line, rents have grown faster than incomes in recent years, whereas in metros below the diagonal, incomes have grown faster than rents.
Florida is the Epicenter of the Crisis
Rent burden is a significant issue across the country, but its severity also varies meaningfully by geography. In general, markets across the Southern U.S. and along both coasts tend to have renter cost burden rates exceeding the national average. The nation’s coastal markets have long been among its most expensive, but an influx of renters to the Sun Belt has now also driven rapid cost burden increases in markets that were once affordable. Meanwhile the Midwest and Mountain West generally have cost burden rates below the national average, with markets in these regions serving as some of the last bastions of housing affordability.
At the state level, the issue is most extreme in Florida, where 62 percent of renters are cost-burdened, and one-in-three renter households spend more than half of their income on rent. Among the metropolitan areas with the nation’s highest rates of rent burden, all of the top five and seven of the top ten are located in Florida. Cape Coral leads the way, with more than two-thirds of renters facing burdensome rental costs, followed by Miami (65%), Tampa (61%), Orlando (61%) and North Port (60%).
Two of the remaining metros with the worst cost-burden rates are located in California, but they not be the ones you would expect – Fresno and Riverside have relatively more affordable housing costs compared to California markets like San Francisco and Los Angeles, but that housing cost advantage is more than offset by lagging incomes in these areas.
At the other end of the spectrum, Des Moines, IA has the nation’s lowest renter cost burden rate. But even here, 43 percent of renters struggle with excessive rent costs and more than one-in-five spend more than half of income on rent – housing affordability is a major issue even in the parts of the country that are performing best.
In general, the markets with the lowest cost-burden rates tend to be mid-sized and fairly affordable, away from the Sun Belt and coastal regions that have struggled to keep pace with rental demand. One notable exception is San Jose, CA, which has the nation’s 10th lowest renter cost burden rate despite having the highest metro-wide median rent among the 100 largest metros. This counter-intuitive combination of astronomical rents and below-average cost burden is attributable to the fact that the San Jose metro – home to Silicon Valley – also boasts some of the nation’s highest salaries.
The Myth of Declining Inflation
The BLS averages this all out and says real (inflation-adjusted income) is rising faster than the CPI.
That may be true for those who own their own home and refinanced their mortgage near three percent.
Even then it’s rather iffy.
CPI Year-Over-Year Percent Change
Hourly Wages
Let’s dive into the latest jobs report to check on wages.
Please consider Nonfarm Payrolls Rise a Mere 12,000 with Government Jobs Up 40,000
Average Hourly Earnings of All Nonfarm Workers rose $0.13 to $35.46. A year ago the average wage was $34.10. That’s a gain of 4.0%.
Average hourly earnings of Production and Nonsupervisory Workers rose $0.12 to $30.48. A year ago the average wage was $29.29. That’s a gain of 4.1%.
Assuming you own a home instead of renting, hooray, your wages may finally be keeping up with inflation.
But if you are paying 40 percent of your monthly income to rent, probably not.
I discussed how that influenced the election in Why Trump Won the Election in One Clear Picture
Young voters and Blacks, the primary renter classes, switched from Democrat to Republican in huge numbers.
People in rural areas are buying homes as it’s the same cost to buy vs rent. I had two renters this year buy a home and move, even on soc sec and disability. When these homes cost 200k it gets frustrating (months) finding tenants. Most have crap credit and a 20hr job.
Otherwise referred to as “declining standard of living”.
Bernanke held the means-of-payment money constant for 4 years straight. Powell increased the means-of-payment money to all-time highs by November 2020. The price level has been permanently increased. Powell has validated the housing price increases.
Deport 40 million illegal aliens and wages will rise, rents will fall, and the Don will get a Nobel Peace Prize like Buckaroo Barack, only for sealing the border and peace in Ukraine rather than promises for the planet of the hot lips primates. Oh, and drill baby drill. .
“Deport 40 million illegal aliens and wages will rise, rents will fall”
Exactly. Win-win for the rank and file while the grifter 1% gets screwed.
We are gradually becoming a country full of buildings nobody is allowed to enter.
There simply is no fixing America or Europe and other Debt-burdened messes.
We own a HOME AWAY FROM HOME in a Co-Op RV Park that we use when we are not in Europe. RENTS ARE CHEAP and even then there are individuals here who are living SOC SEC CHECKS month to month with NOTHING left over.
We have created a Food Pantry for donated Canned and Fresh goods. It gets wiped out in a week. I see their vehicles (very old, dilapidated). Then, there are WE RV-ERS who use these like a Vacay home. New cars, eating out, having a ball.
This place is a microcosm of AMERICA. I see it clearly.
Is it this simple?
1) People who save and invest for the future
2) Those who don’t; and prefer to live for today
I hear both from group 2…
a) “the govt will take care of you” if you hit hard times”
b) and “the move you save, the more the govt takes”.
And remember kiddos, your fearless leader “may” try to have you believe that 12.5M new illegal residents have nothing to do with the continued increases in rent. And lord knows it would be a horrible idea to deport some of them to easy the rent burden.
If SPX next stopping action will happen in Dec it will not slow down rent increase. Greedy landlords will cont to raise rent at least until Q2/ Q3 2025.
I guess this ^ passes for productivity in this day and age.
I am sure that the rise in rents is all to be blamed on illegal immigrants, same for the non growth of wages
Illegals ate my baby!
Did black voters really vote GOP in big numbers on Nov 5th 2025? 93% of black women voted for Kamala and 78% of black men for Kamala. Now Hispanic men actually really did go strong GOP, with 55% of them voting Trump.
I did not say a majority of Blacks voted for Trump. Nor did Hispanics.
I said record numbers switched i.e. the percentage of Blacks voting for Democrats plunged
OK I haven’t checked the rate of change since 2020.
The Hispanic vote matters more than the Black vote. Blacks remain about 10% of the population while Hispanics are approaching 20%. In another decade or so I wouldn’t be the least bit surprised if the Hispanic percentage went somewhere between 25-30%.
absolutely correct…. Which will continue the decline of the Democratic party . And I’m glad
Why Elon Musk can never balance the budget, in one chartElon Musk wants to slash trillions in “waste.” Good luck, buddy!
https://www.vox.com/policy/387382/musk-trump-balance-budget-doge
Except for the $1.018T in interest expense, there’s going to be a staggering amount of waste, fraud & abuse in the other $5T+.
It might not be enough to “balance the budget”, but let’s at least try to make a big dent in the profuse spending. The way you and Vox cast this you all make it seem like they won’t find a single red cent to save.
As a landlord, I have raised rent three times in the last six years. I’m still below market, but understand people need to live too and not suffer under a debt burden. I do see a mismanagement of money with my renters, but hey, that’s their problem and my reward.
The reason I had to raise the rents is because increase in utilities (I pay water/garbage unlike a lot of places having you pay this), repair costs have skyrocketed (plumbers, electricians, tradesmen know that they can rape you and do), and building materials have gone up. I was fine up to a point until I noticed that expenses were drastically going up. I do a lot of the work myself, but use people as well. I’m fortunate to have a number of people that I’ve met along the years to help me with repairs that are much less expensive than your licensed tradesman. My rentals are all single family residences i.e. houses.
Summary: rents have gone up because utilities, repairs and materials have sky rocketed. I just have to laugh when the Fed and the financial pundits say that things have gone up 2-4% and we are now in a supposed deflationary period. These people look at charts too much. No attachment to reality. Lastly, our dollar is buying less and less. As Mish as correctly stated, I doubt Trump will make things better. Would have been worse with Harris. Just hoping for the best .
Property taxes are also VERY high in many parts of the USA. Insurance costs too. Landlords have to price that into rents to get positive cash flow.
Overall, insurance, property taxes, maintenance, and property management costs have all gone up big in the last 4 years. With all of that in mind, the difference in cost between buying and renting is at near record levels (ie: relative to cost of buying, renting is cheaper than it has been in a long time). I too charge well under mean rental costs and folks who stay a long time tend to be as much as 40% below mean rent. But it still has resulted in rent increases. I see double digit insurance increases for multiple years in a row.
the house insurance????
Mortgage & rent payments have the same components: principal, interest, taxes and insurance. The smart real estate people locked into fixed principal and interest costs, but it is the property tax & insurance costs that are surging upward. Insurance increases is easy: more multi-billion dollar insured losses due to hurricanes and wildfires (climate-change?) and property taxes fund the increasing numbers of baby boomers (and older Gen-X people like me) now retiring at 50-65 with cop, fireman and teacher pensions that are underfunded and need to be paid. Rents arent gonna go down for years because of these two costs alone …
You are spot on. Interestingly, many of the housing cost drivers have nothing to do with the federal government but are mainly influenced by state and local policy: land use, property tax, insurance, labor, zoning, utilities. I don’t disagree with Mish about the trajectory of the rental burden. I would also say that there is correlation between the rental burden and the Presidential outcome. But correlation is not the same as causation unless the rental burdened cohort believes that the President of the U.S. has oversight and can influence state and local policy. If you begin dissecting down ballot outcomes, where the policies impacting rent burden matters most, I am not of the opinion that you saw a wave of disgruntled renters delivered big changes. What am I missing here?
If I see one more “climate change” reference to insurance costs comment…
The damn real-estate inflation is THE reason. Every claim is impacted by the near doubling of housing prices. Every thunderstorm, fire, hurricane, tornado,mud slide, flood (all of which have occurred historically year after year) are having to be paid at 2x prices.
Inflation is causing all the damage. Fueled by debt-ceiling-suspended deficit spending backstopped by the fed who let the transitory inflation burn…
Problem is the asset holders love the housing and stock bubble as do the taxing entities.
Until and unless policy makers are willing to eat into asset holders passive gains to help main street the widening gap will create even more domestic angst.
You dont have to believe in climate change. The insurance industry definitely does, and adjusts their revenue accordingly.
Climate isn’t changing with rapdity, climate changes slowly. Now INFLATION, that changed with rapidity.
Follow along with the line of thinking here. Home (and assets such as stocks, bonds, gold, bitcoin) inflation along with the cocomitant product/goods and services inflation is THE thing the insurance companies are adjusting their revenues to. That’s the NOW event. Building homes along shores and having them be valued at insane valuations are where their risk is, not in 2 degrees celsius change 40 years from now. They can and will adjust their risk models but the inflation is the driving force now.
That is this isn’t about the relative rates of claims but the insane costs of those claims due to inflation.
Everyone is reeling from the last 3 years of inflation unless you are an asset holder AND have avoided a catastrophic event such as loss of job, health crisis or an uninsured loss.
Sadly there are a lot of interested parties that are unwilling to part with those passive/capital gains and will do anything to keep this gravy train running along. The election had a lot to do with a large segment of the population that is losing ground, opportunity and hope.
Lessors must be compensated for covid deadbeats who could not be evicted and compensated for the risk that government would stiff them again. Government caused high rents. Government is the enemy of The People. We voted for President Trump to curtail the government threat.
In addition to higher insurance and property tax, there is also a shortage of housing since rich hedge funds and private equity used 0%/free bank money from 2008-2022 to buy up everything that wasnt nailed down (stocks, bonds, companies, housing ….). Youre also welcome for your fresh air and water thanks to the awful government.