“Inflationary pressures means consumers across the board are making difficult choices — making trade-offs on bills to pay or not being able to pay their bills at all,” Palmer said. “Consumers are much more strained than before the pandemic and surviving in day-to-day life is more expensive.”
Renters are least equipped to absorb higher prices, according to the survey. Only 38% of employed renters reported getting a raise, compared with 48% of employed homeowners. Of renters who received a raise, a third said the raise wasn’t enough to compensate for their rent increase.
Nationwide the median rent rose to $1,876 in June, a new record for the 16th consecutive month, according to Realtor.com. Those increases come after pandemic-era rental assistance programs and rent moratoriums have expired, creating an especially difficult situation for the lowest-earning renters, many of whom lost jobs in the last two years.
The average minimum-wage worker needs to work 79 hours per week to afford a one-bedroom at fair market rent or 96 hours per week to afford a two-bedroom, according to a new National Low Income Housing Coalition’s (NLIHC) “Out of Reach” report.
If wages were adjusted for inflation and rents, the average person needs to earn $21.25 per hour to afford a one-bedroom apartment and $25.82 per hour to afford a two-bedroom apartment.
To help with rent affordability, Freddie Mac has programs to encourage and incentivize multi-family owner-operators with tenants to keep units affordable, like its targeted affordable housing, Palmer said.
“Freddie Mac Multifamily is charging toward a record year for our affordable housing work,” Palmer said. “But it’s going to take a concerted, sustained and comprehensive effort to turn the tide.”