Rising Rents, Falling Wages Leave More Cash-Strapped
September 16, 2014
Renters are increasingly becoming cash-strapped, facing higher rents while their paychecks are shrinking or stagnant, RealtyTrac reports. Nationwide, rents have risen by 6 percent over the last decade, according to data compiled from Harvard's Joint Center for Housing Studies.
The Affordability Crisis
Meanwhile, incomes have plunged, falling 13 percent over that same time period. More than half of all renters now are devoting 30 percent or more of their income to paying rent, up from 12 percent a decade ago.
Among some of the least affordable rental markets (in which the percent of income spent on rent is 42 percent or more) are: Bronx County, New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa.; Baltimore City, Baltimore-Townson, Md.; Philadelphia County, Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.; Kings County, New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa.; and San Francisco County, San Francisco-Oakland-Fremont, Calif., according to a RealtyTrac analysis.
Coinciding with the increase in renting, home ownership rates have been falling.
Traditionally, home owners have long outnumbered renters by more than three to one, according to RealtyTrac. But since the recession, the rate of home ownership has steadily been dropping, falling from a 69.2 percent peak in the fourth quarter of 2004 to 65.2 percent in the fourth quarter of 2013, according to Census data.
The number of renter households has risen to 43 million, or 35.4 percent of all U.S. households, which is up from 31 percent in 2004, according to Harvard data.
"The American Dream of owning a home is still alive and well today in the United States, but it is increasingly under assault by a growing number of renters," RealtyTrac writes in a recent article.
Source: “Will Rents Fall?” RealtyTrac (Sept. 12, 2014)
Updated: November 23, 2020