Americans are facing increasing financial challenges, with $1.1 trillion in credit card debt and a record number struggling to afford rent.
Credit card debt has risen by $50 billion in the last quarter, with missed payments on the rise, particularly among people in their 30s.
“In the case of credit cards, it looks like things have reverted to a level that is worse than pre-pandemic,” New York Federal Reserve researchers stated.
Inflation, spiking rents, and rising car prices contribute to the debt increase.
A record 22.4 million renters, half the country’s renters, spend over 30% of their income on rent and utilities.
“So you can certainly imagine the kinds of tradeoffs that have to happen,” Harvard center senior research associate Whitney Airgood-Obrycki said.
“Cost-burden renters are spending less on things like food and health care and retirement. So, there are significant implications for the long-term well-being of these households,” Airgood-Obrycki said.
Median weekly wages have only grown by 1.7% between 2019 and 2023, leading to significant tradeoffs for cost-burdened renters.
Homelessness is also increasing, with about 653,000 people reported homeless in January of last year, marking a 12% increase from the previous year and a 48% increase from 2015.
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