According to an article recently published in REALTOR®Mag by the National Association of REALTORS®, the gap between rental costs and household income is widening to unsustainable levels across the country. As more renters face steeper costs, it may put them even further away from home ownership, according to a new study released by the National Association of REALTORS®. NAR evaluated income growth, housing costs, and changes in share of renter and owner-occupied households over the past five years in metropolitan statistical areas across the U.S.
Over the last five years, a typical rent rose 15%, while the income of renters grew by only 11%, according to their research.
New York, Seattle, and San Jose, Calif., are among the cities where combined rent growth far exceeds wages, according to the survey.
Meanwhile, those who were able to buy a home in recent years have been insulated from the rising housing costs since they were able to lock-in a low 30-year fixed-rate mortgage with a set monthly payment, according to NAR's study. As such, home owners were able to grow their net worth as home values increased and their mortgage balances went down.
The markets that have seen rents rise by the highest amounts since 2009 are:
- New York: 50.7%
- Seattle: 32.38%
- San Jose, Calif.: 25.6%
- Denver: 24.14%
- St. Louis: 22.26%
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