​The financial pain of middle- and low-income renters

Even as home prices continue to recover from the last decade's housing collapse, there's another crisis developing: sky-high rent burdens.

About 11.4 million American households are paying more than half of their incomes to afford their rent, a record high, according to a new report from Harvard's Joint Center for Housing Studies. Rent burdens are especially widespread in moderate-income households in the 10 most expensive housing markets, where the report notes that three-quarters of renters earning less than $45,000 pay more than 30 percent of their income on housing.

The rise of high rent burdens may have widespread implications for the economy. Households that are stretched thin by making the rent have less income to spend on other goods, for instance. It's also making it more difficult for young Americans to establish their own households, given that recent college grads tend to make less than mid-career adults. That may explain why more young adults are now living with their parents than with a spouse or partner, a tipping point in modern history.

"The question is not so much whether families will want to buy homes in the future, but whether they will be able to do so," said Chris Herbert, managing director of Harvard's Joint Center for Housing Studies, in a statement.

Paying a large share of income to the landlord makes it tougher to save up for a down payment. That could catch up renters in a cycle of lease agreements, never quite able to secure the dream of homeownership. Based on the trends, it's no surprise that demand for rental properties continues to be strong, yet the national homeownership rate has been on a 10-year decline.

The percentage of Americans who own their own homes slid to 63.7 percent in 2015, the report found. That's the lowest level in almost half a century, the report found. The decline is particularly steep with adults in the demographic groups that are most likely to make their first home purchase, such as 25 to 29 year olds.

The issue is complicated by more than high rents, however. Banks have tightened mortgage qualifications, making it harder for some borrowers to secure a loan. Since 2010, the lending market has cut off mortgages to the subprime market, or people with credit scores below 620, the report notes.

Younger Americans are also struggling with a decline in real incomes, with 25 to 34 year olds coping with an 18 percent slump in real incomes, which has added to the difficulties of saving for a down payment.

With homeownership declining, the rental market is where the housing market is shining. More than 36 percent of U.S. households were renters last year, the highest share in five decades.

"Rental demand has risen across all age groups, income levels, and household types, with large increases among older renters and families with children," the report noted.

That's also prompted a rise in households who are cost-burdened, or paying more than 30 percent of their incomes to their landlords. About 21.3 million American households are now considered cost-burdened, an increase of 3.6 million from 2008.

Federal assistance hasn't kept up with the needs of poor and moderate-income families who are coping with high rents, however. Only about one-quarter of Americans who qualify for federal assistance receive it, the report noted.

"Housing cost burdens also expose renters to the risk of eviction, with all its damaging impacts on household finances, employment prospects, and school performance," the report noted. "In 2013, 2.1 million low-income renters reported that they had missed a rent payment in the previous three months, and a similar number stated they believed they were likely to face eviction in the next two months."

Eviction leads to more instability for families, and can force children to move schools and deal with the upheaval of a sudden move.

Herbert said, "Policymakers at all levels of government need to take stock of what can and should be done to expand access to good-quality, affordable housing that is so central to the current well-being and potential contribution of each and every individual."