If you're renting right now then it's definitely not news to you that the rental market is sky high and climbing. So just how out of control is it out there? A Harvard University housing study recently released their findings about which US cities are facing the worst price hikes and who is spending what each month. It's not only your city that's feeling the pinch, this National map will break it down.
There's a lot of red and orange on that map which means a shockingly high number of Americans are spending upwards of 40% of their income on rent. The common rule of thumb that housing costs shouldn't exceed one third of your income is no longer doable for many Americans. According to this research, 49% of renters fall into the budget-busting 30% and above category, qualifying them as "cost burdened."
So what exactly is causing this rental boom? Thanks to the lingering after-effects of the housing crash, home ownership rates are at a 20-year low, shooting rental properties into high demand. Home ownership rates have fallen to 1993 levels of 64.5% and the researchers note that that percentage is still relatively high thanks to baby boomer homeowners skewing the data; rates have fallen the farthest for people ages 35-44 and 45-54.
So more middle aged folks are looking to rent, sending prices up up up until we're all paying huge, debilitating chunks of our incomes to our landlords.
Sound familiar? What percentage of your income do you spend on rent?
Read the entire Housing Report at Harvard's Joint Center for Housing Studies and then come back and tell us your thoughts.