New Federal Data Shows Housing Costs Are Rising Faster Than Incomes — and Homelessness Is Climbing as Support Shrinks
Millions of renters in America are struggling to afford their homes, even though governments and nonprofits have expanded their rental assistance pipelines, according to a new report.
Housing instability and homelessness are inextricably linked. According to the National Alliance to End Homelessness, the lack of affordable homes combined with weak social safety net programs and ongoing disruptions resulting from the COVID-19 pandemic are all driving the rapid increase in homelessness across America. These issues affect nearly everyone earning below an area’s median income, but they are magnified for those at the lowest end of the scale.
New data from the Department of Housing and Urban Development suggests that the housing stability of America’s lowest-income renters is getting worse. That is happening at a time when the federal government is attempting to dramatically reduce its support for local homeless services, and the rising cost of living is threatening to push more people out of their homes.
Since 1978, HUD has published data about the housing needs of low-income renters across the country. HUD considers renter households to have the “worst case” needs if the households earn less than 50% of an area’s median income, do not receive federal assistance, and spend half or more of their income on housing costs.
Worst-Case Housing Needs Remain Near Record Highs
Last year was the first year in almost a decade that the data showed a decline in worst-case housing needs for renters, according to a report from Harvard’s Joint Center for Housing Studies. Even so, there were still 8.46 million renter households that HUD considered to have the worst-case housing needs, which is just slightly below the record high of 8.53 million that was noted in 2021 during the height of the coronavirus pandemic.
The report attributed the slight decline in worst-case needs households to several factors, including improved rental assistance, robust household formation, and increased affordable housing units. But the report also cautions that the modest improvement measured over the last year may be due in part to a growing number of households that are falling off the scale and becoming homeless.
“Despite this bit of good news, many housing challenges remain,” the report reads in part. “The number of households experiencing worst-case housing needs remains near record highs. Additionally, while extremely low-income households have gotten some relief from the worst housing challenges, assistance still does not meet the vast need that exists.”
When Renters Fall Off the Scale
America’s renters have been under significant financial strain since the COVID-19 pandemic began. Not only did the pandemic dramatically increase demand for housing, thereby contributing to the sharp increase in rents and home prices, but it also hindered the ability of some renters to earn an income, especially those who were unable to work remotely.
Recent research from Harvard’s JCHS found that about 22.7 million renter households were cost-burdened in 2024, meaning they pay more than the recommended 30% of their income on rent and utilities. That 22.7 million figure represents 49% of all renter households nationwide, and the figure has grown by more than 2.3 million households since 2019, the year before the pandemic began.
In response, the federal government passed legislation to significantly expand funding for local rental assistance, which prevented a significant number of renters from becoming homeless. Those efforts helped about 300,000 more very low-income households receive assistance in 2023 than in 2021, although “assistance continued to fall short of need,” according to Harvard’s report.
But the temporary support renters got during the pandemic wasn’t enough to solve the preexisting challenges. For instance, HUD’s data shows that the median income of renter households declined by roughly 3% between 2019 and 2023, while the cost of housing increased by more than 17%. The dislocation of incomes and rents significantly increased housing insecurity for low-income earning households, which bore the brunt of the rent advances.
Homelessness Is Rising — Especially for Families and Seniors
HUD also called out the income and rent gap in its report to Congress about homelessness in America. In 2024, more than 771,000 people experienced homelessness across the country, marking an 18% increase from 2023. The fastest growing subpopulations of people becoming homeless are households with children and senior citizens, both of which are vulnerable to the rising cost of living.
The temporary support renters received during the pandemic also increased competition for affordable housing, especially among households with growing incomes seeking better housing conditions.
“This suggests that renter income growth did not fully solve the underlying housing challenges but instead pushed households beyond the very low-income cutoff for having worst-case housing needs,” the report added.
What Happens Next Is a Policy Choice
Now is not the time to be silent about homelessness in the United States or anywhere else. Unhoused people deserve safe and sanitary housing just as much as those who can afford rent or a mortgage.
Poverty and homelessness are both policy choices, not personal failures. That’s why we need you to contact your officials and tell them you support legislation that:
- Streamlines the development of affordable housing
- Reduces barriers for people experiencing homelessness to enter permanent housing
- Bolsters government response to homelessness
Together, we can end homelessness.