One out of three Americans now live in a housing market where rent for a three-bedroom home eats up more than 30% of the monthly median income, the traditional threshold for affordability, according to RealtyTrac. And in some cities, residents are doling out a much larger percentage of their paychecks.
In New York City's borough of the Bronx, the typical household spends nearly 66% of their monthly income to rent a three-bedroom house -- by far the highest percentage of any U.S. county, RealtyTrac found.
With an overall median income of less than $35,000, not only does the Bronx contain some of the nation's poorest communities, but average rent is high at nearly $1,800 a month.
Similar trends are occurring in other cities that are home to large pockets of low-income residents. Renters in Philadelphia, Brooklyn, Baltimore and Miami are paying nearly 50% of their income toward rent, RealtyTrac reported.
So while New York Times columnist Paul Krugman continues to fret over potential price deflation or price inflation below the Fed's "target" 2% inflation, the biggest expenditure for many households, especially low-income households, rent, is climbing at well over 2.0%