Monday, April 25, 2011

Study: 26 percent of renters spend over half their income on housing

by Bill McBride on 4/25/2011 11:12:00 PM

From Dina ElBoghdady at the WaPo: Affordable rental housing scarce in U.S., study finds

The share of renters who spend more than half their income on housing is at its highest level in half a century and it’s no longer just low-income tenants who are feeling the pain, according to a Harvard University study scheduled for release Tuesday.

About 26 percent of renters — or 10.1 million people — spent more than half their pre-tax household income on rent and utilities in 2009.
...
Developers cut back on such projects when the economy deteriorated in 2009, which drove down vacancies and boosted rents.
...
In many areas, the demand is driven by families who lost their homes to foreclosure ... [and] as the job market recovers, more newly employed young adults appear to be seeking their own apartments instead of living with their parents, putting even more upward pressure on rental rates ...
This is a very high percentage of their income for housing. Add in higher gasoline prices, and there can't be much left.

Recent reports have shown the apartment vacancy rate is falling rapidly - and rents are rising - so this situation is probably even worse now than in 2009. Note: The Census Bureau's Q1 Housing Vacancies and Homeownership report will be released Wednesday and includes the rental vacancy rate for Q1.

Home sales for March:
New Home Sales in March at 300 Thousand SAAR, Record low for March
Home Sales: Distressing Gap
New Home Sales and Inventory Graphs
Existing Home Sales and Inventory Graphs

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