Nearly one in five people who participated in a Freddie Mac survey this summer and had rent increases said they expected to miss rent payments.
Freddie Mac, a publicly traded, government-sponsored financial company conducted the survey from June 6 through June 10 and results were released late last month. Most of the people surveyed (60%) said their rents had increased over the previous 12-month period.
During what Fortune called “The Pandemic Housing Boom” housing prices went up. In the past 12 months alone, they increased by 19.7%, said the outlet.
Per the Freddie Mac study of 2,000 people age 18 and older, a ratio of nearly one in three people who had experienced rent increased saw prices go up at least 10%. Just 38% of those people said they had wage increases, and even then, some said their pay boosts would not cover their increased rent obligation.
Home prices have also forced people to change their home buying plans, according to survey results.
Close to three-quarters of renter households who have changed their homebuying plans said they are less likely to purchase a home.
Around 50% cite high home prices 34% cite high interest rates (instituted by the Federal Reserve to help deter home buying and thus bring down rapidly increasing prices) and 39% said they would have difficulty coming up with a down payment.
Along with higher interest rates came higher mortgage rates, Fortune explained. These rates hit a peak of 6.28% in June.
“The surge in rents that took place over the last 12 months has created even greater housing uncertainty for the most vulnerable renters,” said Kevin Palmer, head of Freddie Mac Multifamily. “Our survey shows that the national housing affordability crisis is worsening, and that inflation is a key driver. Freddie Mac Multifamily is charging toward a record year for our affordable housing work, but it’s going to take a concerted, sustained and comprehensive effort to turn the tide.”
A vast majority of survey participants (96%) said they had been impacted by inflation overall and 66% said they were particularly impacted by increased costs for groceries and household supplies. According to the U.S. Bureau of Labor Statistics, the Consumer Price Index increased by an estimated 8.5% from July 2021 to last month.
While Americans are still dealing with inflation, there are some indicators that prices may soon begin to cool.
Fortune reported this week that Moody’s Analytics predicts U.S. home prices will rise 0% next year, though the outlet cautioned that prices are expected to vary widely in different parts of the country. Additionally, the Bureau of Labor Statistics said the CPI remained unchanged from June to July and gas prices have recently fallen, according to AAA.