Submitted by Jen Jones on Fri, 05/27/2011 - 2:45pm
After years of being mired in an economic malaise driven by the foreclosure mess, rising consumer debts, and mounting medical costs, you’d think it would finally be about time for a good old financial reprieve for American families. Unfortunately, new figures reveal the real financial challenges—even post-recession—that are currently jeopardizing a U.S. family’s most basic needs and forcing many to make a decision between food and shelter. According to a recent report, approximately 10 million American households— representing one in every four families that rent their homes—could have to choose between paying rent, buying groceries or staying current with bills.
As The Huffington Post reported, “The number of households spending more than 50 percent of their income on rent and bills jumped by 2.6 million over the last decade, according to a Harvard Joint Center for Housing Studies report. Economists generally consider "affordable" rent to cost about 30 percent of a tenant's income. When housing costs hit certain levels, many Americans are forced to choose between rent and food. ‘In real terms, it means more people have less money to spend on household necessities such as food, health care, or savings,’ Eric Belsky, director of the Harvard Joint Center for Housing Studies, said in the report. Households, which spend 50 percent or more of their income on rent, also spend almost 40 percent less on food and over 50 percent less on health care than households with more affordable rent.
‘In the last decade, rental housing affordability problems went through the roof,’ Belsky said in the report. ‘And these affordability problems are marching up the income scale,’ he added.” That’s right. Another lesser-studied symptom of the housing crisis is a rise in rental costs as Americans, unwilling or unable to purchase another home post foreclosure, drive rental vacancies down and rental prices up. In addition, as employment rebounds, younger workers, new to the workforce and the falling salaries of the new economy, are unable to save the tens of thousands needed for down payments on a home and instead turn to trusty rental options.
The subsequent rise in rental costs are straining already beleaguered household budgets of middle-class families, with growing numbers of middle- and lower- income renters spending well over 30 percent of their incomes to put a leased roof over their heads. And, as the economic recovery takes hold, many believe it could drive rental prices even higher. “Even before the recession, rent increases and growing bills outpaced many stagnant salaries,” wrote HuffPost’s YepokaYeebo. “Now, with modest improvements in the job market, there is renewed upward pressure on rents. Many former homeowners who faced foreclosure are now looking to rent, and people who ordinarily would have bought homes are struggling with tighter mortgage lending, while others are waiting for home prices to sink even lower.” Are you one of the one in four families struggling to choose between basic sustenance and rent for shelter?
If cutting back on the basics like eating out, cable TV, or other small luxuries isn’t enough to shore up your family’s basic rental expenses, it may be time to consider other options for freeing up funds for basic needs, including bankruptcy. Food for thought: The bankruptcy experts at the Law Offices of John T. Orcutt provide a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to +1-833-627-0115, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.
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