CNNMoney recently reported new data — one out of three Americans now live in an unaffordable housing market, categorized where rent for a three-bedroom home eats up more than 30% of the monthly median income, the traditional benchmark for housing affordability. The highest percentage of monthly income was found in New York City’s borough of the Bronx, where the typical household spends nearly 66% of their monthly income on housing. In the Bronx, the overall median income is less than $35,000 while average rent is an astonishing $1,800 per month. Similar factors are in play in cities with larger areas of low-income residents, including Philadelphia, Brooklyn, Baltimore and Miami, where residents are paying nearly 50% of their income towards rent.
A report released in December by Harvard’s Joint Center for Housing Studies found that nearly one in four renters devoted more than 50% of their income to rent. With rents continuing to climb, many Americans will be unable and unwilling to waste more of their monthly income on rent. Shorewest reported on the rental crisis in March, showing the true value of homeownership compared to renting. This may be the “worst rental affordability crisis this country has known,” according to Shaun Donovan, Secretary of Housing & Urban Development (HUD).
With rents at an all-time high, now is the time to talk to a real estate professional and qualified loan officer about home buying affordability. Our Shorewest real estate agents and Wisconsin Mortgage Loan Officers can give you more details on buying and financing a home in your area. Stop paying your landlord’s mortgage and reach out today to learn more.