US renters remain burdened as insurance pressures on landlords mount

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Renters remained burdened in the U.S. during the third quarter of 2023 despite a slight improvement as insurance costs to landlords mounted, according to a new report by Moody’s Analytics.

Moody’s Analytics found that in Q3, the U.S. rent-to-income ratio (RTI) declined slightly by 0.5% and ended at 30%, a level that is the threshold for being rent-burdened. Renters are considered «burdened» if their rent payments consume 30% or more of their gross, or pre-tax, income. This comes after last year marked the first time that the median renter household in the U.S. paid over 30% of their income on an average-priced apartment when the national RTI reached a high of 30.8%.

Lu Chen, a senior economist at Moody’s Analytics, told FOX Business that the firm found a lack of inventory growth in the moderate- to lower-cost Class B and Class C apartments contributed to the persistent rent burden.

«Rent continued to be burdensome for median income households. For moderate- to lower-income families, growing income inequality and the lack of inventory growth in affordable and Class B/C space, their already higher rent burden will be even more exacerbated.»

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The median renter household in the U.S. remained burdened in the third quarter, with 30% of their income going to paying for rent. (Joe Raedle/Getty Images / Getty Images)

The report also found that while rent growth drastically outpaced income growth in 2021 and 2022, which pushed the dramatic growth in the national RTI, the trend started to reverse in Q1 of 2023 as incomes rose