Good news for current and potential homeowners: while renters are paying more, affordability is improving for those who own their homes. The number of cost-burdened homeowners declined in 2014 for the fourth consecutive year while today low-income renters are getting squeezed out by the more affluent.
Three of California’s cities appear on a list recently reported by CNN Money as having the highest rental rates in the country: Los Angeles takes the #7 spot, San Jose claims its place at #6, and San Francisco debuts at #1 on the list. A particularly tight housing market inventory is forcing the wealthy to stay in rentals longer, driving the demand for housing up. This leaves mid- and low-income renters gasping for air while trying to stay afloat during what CNN calls “last year’s biggest surge in new renters history” with low-income renters especially feeling the hit.
Although builders are inclined to focus on producing luxury apartments that yield higher investment
returns to support the rental market at hand, they are also aiming to ramp up their efforts to increase
lower-end homes for sale. This means that while more Americans struggle to make rent, homeownership viability is on the rise. According to the Joint Center of Housing Studies at Harvard University, in 2014 a shocking 11 million people put at least half their income toward rented housing while 21.3 million spent 30% or more of their paycheck. Unfortunately for renters these days, 2016 trends are following suit. CNN reports, “Rents have been rising faster than wages recently, which has caused an affordability issue for many renters.” With California taking the ranks in soaring rent prices, there is no doubt that industry aims to dip prices for prospective homeowners will provide some much needed relief from renter’s remorse.
Are you thinking about buying a home? Now is the time! I have over 10 years of experience in the Southern California home lending market, and can help make the process as painless as possible for you. Contact me today! And thank you to Nisan Real Estate for helping our clients find their dream home.