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.

  • 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.

[Tweet The middle class can no longer afford rental housing in nearly 90 cities across the U.S.”]

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.

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 showed that renters in Miami spend 44.5 percent of their income on rent, while buyers contribute 20.5 percent of their earnings toward a mortgage.

Markets similar to Miami included: 

  • Chicago
  • Dallas
  • Houston
  • Tampa
  • San Antonio
  • Indianapolis
  • Austin
  • Columbus
  • Cleveland
  • Orlando

In all these metros, there exists at least a 15 percent gap between incomes spent on rent versus a mortgage.

Denver, Los Angeles, San Francisco, San Jose, and San Diego are unaffordable for both renters and buyers.

In San Jose, renters and buyers put roughly 42 percent of their incomes toward housing. Renters in Los Angeles, San Francisco and San Diego put 44 percent to 49 percent of their income toward housing.

Email Erik Pisor

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