What's good news for landlords can spell trouble for tenants.
The share of American households who rent their homes has reached a 50-year high, at about 37 percent, according to the Harvard University's Joint Center for Housing Studies' annual State of the Nation's Housing report. That's up five percentage points since 2004, which was when homeownership peaked and before the housing market crashed.
The dynamics of the rental market are complex and are due to more than the surging ranks of young millennials who can't yet afford to buy a home. Households of people over 55 years old represented 44 percent of renter household growth in the last decade, compared with 24 percent for the millennial generation, the study found.
The result? Almost one-third of American households paid more than 30 percent of their incomes for housing, which exceeds the rule of thumb for fiscal prudence. When consumers are forced to pay more than one-third of their incomes for housing, it results in tough decisions on cutting back on everything from food to medication.
The choices are even more stark for the "severely cost-burdened," or those paying more than half their incomes toward rent.
"Severely cost-burdened families with children in the bottom expenditure quartile cut back most on food, spending just under $300 per month compared with nearly $500 among comparable households without cost burdens," the report noted. "Severely cost-burdened households age 65 and over in the bottom expenditure quartile also made significant cuts in their health care spending."
In more than two dozen U.S. cities, more than half of renters are considered "rent-burdened," which means they're paying more than one-third of their income toward rent. The number of "severely cost-burdened" renters is growing as well, with 11.1 million households now spending more than half their income on rent, an increase of 3.7 million from 2001.
The typical renter has household income of less than $38,000 per year, or about half of what a typical homeowner earns in a year.
Renters are increasingly struggling to find affordable rental properties. The number of apartments that rent for $2,000 or more per month almost doubled from 2005 to 2015, but the number of units that rent for less than $800 slipped by 2 percent during the same period, the study found.
Read on to learn about the seven U.S. cities where the greatest share of renters are struggling to pay their landlords.