Renters are making more, and landlords get it all.
Some 26 percent of U.S. renters paid at least 50 percent of their income to landlords in 2014--an increase from 20 percent in 2001, according to the new State of the Nation's Housing report, published by Harvard's Joint Center for Housing Studies (JCHS) and cited by Bloomberg. On the positive side, the JCHS study found, the number of homeowners who are moderately cost-burdened (paying 30 percent to 50 percent) or severely cost-burdened by mortgage payments (paying 50 percent or more of their income) actually decreased from 2013 to 2014. Additional data compiled earlier in June by Greg Willett, chief economist at RealPage, suggests that market-rate renters are keeping up with rising rents. Some are even putting money away for an eventual down payment on a house.
The median rent-to-income ratio--derived from 4 million apartments tracked by RealPage--has hovered between 22.9 percent and 23.3 percent since 2010. While monthly rents increased over that period, so did the median income of market-rate renters from $44,000 in 2010 to nearly $58,000 in the first half of this year. That's partly because changing home-buying behavior has kept higher earners in the rental pool longer, Willett said. This has all been good news for apartment owners and operators, who observe that most U.S. renters have been able to find apartments that fit their budgets. It's the poor, though, who are still bearing the brunt of a tight market. The availability of affordable housing falls at the lower end of the market-rate segment, creating ever worsening affordability challenges in lesser-quality rental apartments. For the bottom tier of rental units, i.e. "Class D" apartments, the median renter is spending more than 30 percent of his/her income on rent.
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|Comment:||Renters are making more, and landlords get it all.(BUZZ/NEWSFLASH)|
|Publication:||Journal of Property Management|
|Article Type:||Brief article|
|Date:||Sep 1, 2016|
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