Rising Rent - No Problem
With rising rent costs, it’s time to take control. It’s time for a mortgage.
Renters will need to raise their incomes by an average of $168 a year to keep up with expected rent increases over the next 12 months, according to a new forecast from Zillow*, which added that median rent prices are predicted to be $1,420 at this time next year.
In several major metros, the share of income needed to cover the monthly rent exceeds the concept of not spending more than 30 percent of income on housing. In some of the priciest housing markets—including Seattle, Los Angeles, and Boston—renters will need annual income increases of more than $1,000 to avoid allocating more of their paychecks to cover housing costs.
However, Zillow noted that rent appreciation has slowed and rents are predicted to inch up by only one percent over the next year. Median asking rent since 1988 has risen from $340 to $850...a 150% increase. There are many benefits and options available for first-time home buyers and to those currently renting. Contact me today to get started.
*Zillow computed the dollar value associated with our 12-month-ahead rent forecasts (February 2017 to February 2018) across major housing markets and then compared these dollar values to average wage and salary income in each market as reported for 2016-Q3 in the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages. We then calculated the annual percent increase in incomes necessary to cover expected rent growth over the next 12 months. We assume that the entire paycheck increase will go to housing costs with no increases in other costs. It does not account for taxes or rising costs of other items such as food, healthcare or energy. For markets where we forecast an aggregate rent decline over the next 12 months, we force the necessary paycheck increase to zero.
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