AgentMarkets & Economy

Spending nearly half of income is commonplace for renters, study suggests

Homeownership rate should benefit from 'unaffordable' rents across the nation.
  • California has nearly 20 markets considered unaffordable in terms of rents.
  • This analysis seems to point to a market where rent increases should slow down.
  • There exist a number of markets where renters contribute more of their income to rent than buyers contribute to mortgage.

Nearly half of American renters spend more than 30 percent of their monthly incomes on rent, with one in four contributing more than 50 percent a month. This equates to the worst rental affordability crisis ever seen in the U.S., which should theoretically bode well for single-family home sales activity moving forward. “The middle class can no longer afford rental housing in nearly 90 cities across the United States,” according to recent analysis from Affordable Online Colleges. In California alone, 17 cities are considered unaffordable. Florida, Texas, New York and Oregon all have five or more cities where rents are too high. These findings suggest that if you can save money for a down payment and can qualify for a loan, right now is a good time to buy versus renting. Miami image via Shutterstock. A recent report from Zillow cited Miami as having the largest disparity between what an individual contributes monthly to rent versus a mortgage. The data showe...