Rent Rises At Twice The Pace Of Income

If you think renting is cheaper than buying a house, think again. Recent data shows that, in most markets, buying a home is actually more affordable than renting. And, according to new numbers from Zillow, rent isn’t getting any cheaper. In fact, there were 770,000 new renters last year and a cumulative total of $441 billion spent in rent. That’s up 4.9 percent from the year before and analysts believe rental affordability will continue to decline in 2015. Stan Humphries, Zillow’s chief economist, says rent has grown at twice the pace of income over the past 14 years. “This has created real opportunities for rental housing owners and investors, but has also been a bitter pill to swallow for tenants, particularly those on an entry-level salary and those would-be buyers struggling to save for a down payment on a home of their own,” Humphries said. With rent expected to rise again this year and home prices continuing to stabilize after spiking in 2013, buying a home should continue to be a more affordable option than renting in most markets over the coming year. More here.

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