Americans Are Downsizing Their Homes to Afford Utility Bills — Here’s How Else Budgets Are Being Trimmed
Written by
Vance Cariaga
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Although the U.S. inflation rate has trended lower in recent months, home utility bills are still historically high for a large portion of the U.S. population. In some cases, Americans have had to move into smaller homes just to afford to pay their utility bills.
Roughly one in five Americans (19%) downsized their homes this year to pay utility bills, according to a new survey from Payless Power, a state-wide energy company that provides electricity to Texas residents. In this case, downsizing means that the respondent either sold their home and moved into a smaller one or began renting a smaller/less expensive place to live.
The survey of more than 1,000 people found that 77% of Americans saw their utility costs rise in the last year. More than nine in 10 (91%) have made budget cuts to combat increased utility costs.
The vast majority of respondents (93%) said they support government assistance for utility bills. This crossed over political lines, with Republicans and Democrats equally likely to say they’d apply for government assistance to help with higher costs of living. Although only 4% of respondents have sought utility assistance from the government, 80% said they’d accept it if they were eligible.
High utility costs have been a major financial strain in an environment where just about everything is more expensive than normal. In April, the Labor Department’s Energy Services index rose 5.9% from the previous year, while the Electricity index climbed 8.4%. Both numbers are higher than the overall inflation rate of 4.9%.
A recent GOBankingRates poll of 1,003 Americans found that more than three-quarters of respondents (78%) saw a rise in their household utility bills in 2022. That has continued into this year. As of mid-March, nearly 1.3 million households in New York state were at least two months behind on utility bills and had a combined debt of more than $1.7 billion.
“Almost one in five New Yorkers are staring into potential multi-generational debt,” Richard Berkley, executive director of the Public Utility Law Project, told the Guardian.
Utility prices have soared for a number of reasons, most of which are tied to supply-chain disruptions. These reasons include the COVID-19 pandemic, the Russia-Ukraine war and an increase in severe weather events across the country.
One thing increased energy costs have done is cause people to cut back on other expenses. The Payless Power survey found that 62% of respondents have reduced their entertainment spending. That was followed by reduced spending on groceries (45%), personal care (38%), childcare (36%), healthcare (28%) and debt payments (17%).
In some cases, these spending cuts create even more strain. For example, cutting back on childcare might mean some people have to reduce their work hours while cutting back on healthcare and debt could lead to more financial problems down the road.
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If there’s a silver lining, it comes in the form of using less energy, which will help the environment, if nothing else. The Payless Power survey found that many Americans have been reducing energy consumption and spending by turning off lights (70%) and unplugging items (54%) when not in use. Nearly half (45%) have invested in energy-efficient appliances.
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