Rental Burden Continues to Increase - 8/21/15
Apartment rents continue to climb in America. According to a new report by Zillow, renters can expect to pay thirty point two percent of their income on rent. That is the highest percentage on record according to Zillow, which possesses data tracing back to nineteen seventy nine. The number is significant in part because it indicates that rental burdens have now crept past the thirty percent threshold, which many economists consider an affordable portion of income.
Between nineteen ninety five and two thousand, renters spent a bit more than twenty four percent of their incomes on rent. Rental affordability has deteriorated most rapidly in New York and in pricey West Coast cities. As reported in the Wall Street Journal, renters in Los Angeles can expect to pay forty nine percent of their incomes on rent – in San Francisco, forty seven percent.
There was a time when Miami was considered affordable, but a wave of money from abroad and the relocation of Baby Boomers there has increased demand for housing. Renters pay nearly forty five percent of their incomes in rent there. There is at least one way to spend less on rent – buy a house. But high rents are making it difficult for households to set aside funds for down payments.