Why Rent is Becoming Unaffordable in Most US Cities
Aug 11, 2016
A study released from the State of the Nation's Housing Report from the Joint Center for Housing Studies of Harvard University found that a whopping 11 million Americans are spending more than half of their income on rent. Another 21.3 Million Americans are spending more than 30% of their income on rent, which is another high.
Realistically, rent should only be around 30% or less of one’s total income. When rent is taking up 35%, 40%, and sometimes upwards of 50% of one’s income, it leaves less room for people to meet other financial obligations. Not to mention, the money renters are spending each month is building someone else’s equity, rather than their own.
These rent increases don’t look like they will be slowing down any time soon. To add even more fuel to the fire, average income is not rising at anywhere near the pace that rent is rising – especially in major US cities.
However, interest rates are sticking to record lows, making it an ideal time for renters to make the switch from renting to homeownership. With the wide selection of mortgage programs available to new homebuyers, this is an ideal time to make the switch from renting to homeownership.
If you are interested in building your own equity and saving more each month, now is the time to contact Home Point Financial.