It’s going to get Worse for Renters

We often promote homeownership over renting when a family is ready, willing and able to purchase. There are both financial and non-financial benefits to owning a home of your own. Based on the headlines below, many news outlets agreed with us after they reviewed a recent report from the Harvard Joint Center for Housing Studies and Enterprise Community Partners.

The study states that the number of households spending 50% or more of their income on rent is expected to rise by over ten percent in the next decade. They concluded:

“Overall, this white paper projects a fairly bleak picture of severe renter burdens across the US for the coming decade.”

What do other experts think of the report? You can tell by the headlines they chose to introduce their stories:

“Renters, get ready to take it on the chin” – CNBC

“The Rent Crisis Is About to Get a Lot Worse” – Bloomberg Business

“Renters Will Continue to Struggle for the Next Decade” – World Street Journal

“Why the renting crisis could be about to get a lot worse” – Fortune Magazine

“Soaring rents are a problem that will only get worse” – Business Insider

“High rents are here to stay” – The Real Deal

Bottom Line

If you are thinking about buying a home and are financially positioned to do so, now may be better than later.

Rents in Seattle – What’s Happening?

Did you know – Seattle tenants paid an estimated $8.7 billion in rent this year, which is up 8.6 percent from the $7.1 billion paid in 2014!

According to Seattle online real estate company Zillow Inc., the estimated 11,000 Seattle renters paid $71 extra per month, or $852 per year, in rent this year compared with 2013.

Nationally, Zillow (NASDAQ: Z) renters paid $441 billion in rent in 2014 compared with $420 billion last year, an increase of nearly 5 percent.

Seattle’s 8.6 percent annual rent increase trailed double-digit increases registered in cities like San Francisco (13.5 percent increase), Denver (10.8 percent) and Pittsburgh (10.6 percent).

And renters shouldn’t look for relief any time soon.

“Next year, we expect rents to rise even faster than home values, meaning that another increase in total rent paid similar to that seen this year isn’t out of the question. In fact, it’s probable,”said Zillow Chief Economist Stan Humphries, in a statement.

~Ben Miller, PSBJ