A large portion of Americans remain burdened by rental costs, according to the 2017 State of the Nation’s Housing Report, published by the Joint Center for Housing Studies at Harvard University. The report shows that while homeowners are enjoying the benefit of rising property values, renters are feeling a price squeeze with little relief in sight.
For example, about 11 million renters paid more than half of their incomes towards rent during 2015. Economists consider a household rent-burdened if more than 30% of income is applied to rent.
Rents have been rising sharply for several years. According to Apartment List Inc., the largest jump occurred between 2014 and 2015, when rents increased by a national average of 3.5%. During 2017, rents have increased by a national average of 2.9% on a year-over-year basis.
When considering rent trends on a localized basis, the price hikes can be alarming. 92 of the nation’s 100 largest cities saw year-over-year rent increases. 19 of these cities saw rent increases over 5%. Some of the largest rent increases happened in the following cities:
- Arlington, TX: 9.2%
- Providence, RI : 9%
- Sacramento, CA: 9%
- Tacoma, WA: 7.4%
- Vancouver, WA: 6.6%
- Santa Ana, CA: 6.2%
Would-be homebuyers find it difficult to save for a home down payment while dealing with rising rents. During 2016, the homeownership rate neared historic lows, hovering below 63%, according to the U.S. Census Bureau.
There is some good news for renters. Construction of multi-family housing has been on the rise, which is tempering rent increases in some markets. Rent prices, while still rising, are not accelerating at the pace of the prior year. Aspiring homeowners should explore home buying assistance programs in their city, which could provide down payment funds and other advantages to help make home ownership attainable.
An Exclusive Buyer Agent can help you discover home buying assistance programs, and connect you to trustworthy lenders who can recommend low down payment mortgage options. Plan today for homeownership tomorrow! Find an EBA in your area today!