One byproduct of this decade’s surging home prices is that rental rates have soared as well, forcing many tenants to cut back on essential budget items just to meet their monthly rent payments.
According to data from iProperty Management, rents in the U.S. averaged $1,650 a month as of March 2025. That was up from $1,448 in 2023 and $1,185 in 2020 — a gain of nearly 40% in only five years.
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Meanwhile, there appears to be little relief in sight. In July, average U.S. rents rose 0.9% from the previous year, according to Apartments.com. In this article, GOBankingRates unpacks which budget categories renters are reducing their spending on so they can make rent.
Too Much Money Going Toward Rent
Rising rents are putting even more financial strain on Americans who are already feeling the pain from historically high inflation in recent years.
Nearly three in four renters (73%) report being “cost-burdened” due to high housing costs, according to a new survey from Hud Housing Network. In this case, cost-burdened means they spend over 30% of their monthly income on housing costs. Ideally, you should devote no more than 30% of your monthly income toward housing.
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The survey of 1,000 U.S. renters, conducted in May, also found that 44% of respondents feel “severely burdened” by high rents, which means they spend over half their income on rent.
Nearly two-thirds (64%) say they feel “trapped” renting because buying a home is out of reach. This is an especially big problem for millennials (75%) and Gen Z (70%).
Other highlights from the survey include the following:
- Half of renters have delayed ending a relationship because they couldn’t afford to move out.
- More than 60% have either borrowed money or taken on debt to cover housing costs.
- One in three regret signing their current lease — some within the first month.
- 80% are delaying major life goals such as homeownership, retirement and starting a family.
What Items Are Renters Cutting Back on?
In order to afford rent, many Americans have had to cut back in other spending areas — including household essentials and financial obligations.
Here are the six top things they are cutting back on, according to the Hud Housing Network survey.
- Groceries: 44% of respondents
- Hobbies and social life: 37%
- Contributions to savings or retirement accounts: 28%
- Dating or romantic life: 26%
- Credit card or loan payments: 22%
- Medical care: 19%
Many renters are also delaying major life goals due to high rental costs. Here are the top life milestones being delayed due to rent pressure.
- Buying a home: 29%
- Traveling or taking extended time off: 28%
- Saving for retirement: 25%
- Career advancement: 15%
- Pursuing higher education: 14%
- Starting a business: 11%
- Starting a family: 10%
- Getting married: 8%
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This article originally appeared on GOBankingRates.com: 6 Things Renters Are Cutting Back on Amid High Housing Costs in 2025
