[et_pb_column type=”4_4″][et_pb_text admin_label=”Text”]Over the past ten years, the American economy has been on a rapid rise, yet more and more people are struggling to afford rent. According to the new report published by Apartment List, almost half of American renter households can be classified as cost-burdened, spending more than the recommended 30% of their incomes on rent.
Essentially half of renter households are still spending more than the recommended amount on their housing costs, while nearly one in four spends at least half of their household income on rent. The number of cost-burdened households reached an all-time high in 2014, even though the cost burden rate was improving. Luckily, the number of rent-burdened households has started to fall and is currently lower than the 2014 peak by 774,000 households. Importantly, 2017 was the first year since 2010 that the number of unburdened renter households decreased, indicating that this year’s improvement in the cost burden rate reflects genuine improvement rather than compositional change. That said, the total number of rent-burdened households remains higher than the 2007 level by 3.1 million households.
In North Carolina, the overall cost burden rate fell from 46.9% to 46.4%. This is well below the national average than the national average of 49.5%.
Rental Housing Cost burden rate is decreasing in the Durham metro area.
According to Apartment List’s report, Durham has the nation’s #41 highest cost burden rate. The cost burden rate decreased from 51.2% in 2016 to 49.4% in 2017. This in turn makes Durham the #41 highest cost burden rate of the nation’s 100 largest metros. 25.0% of renter households in Durham are severely cost-burdened, while 24.4% are moderately burdened. The of cost-burdened renter households in Durham has increased by 9,573 since 2007.
In contrast, the rental Housing cost burden rate is increasing in the Raleigh metro area.
Raleigh has the nation’s #8 lowest cost burden rate. Yet, the cost burden rate in Raleigh increased from 42.1% in 2016 to 42.5% in 2017. Raleigh has the #8 lowest cost burden rate of that nation’s 100 largest metros. 17.7% of renter households in Raleigh are severely cost-burdened, while 24.8% are moderately burdened. The number of cost-burdened renter households in Raleigh has increased by 13,787 since 2007.
Cost burden rates tend to be highest in coastal areas with high housing costs.
Miami has a cost burden rate of 62.7 percent, the highest of the nation’s 100 largest metros. Nearly one in three cost-burdened renters (30.8 percent) lives in California, New York or Florida. In 20 of the 25 largest metros, a household earning the median renter income would be cost-burdened by the median rent.
Luckily, the number of rent-burdened households has started to fall and is currently lower than the 2014 peak by 774,000 households. That said, the total number of rent-burdened households remains higher than the 2007 level by 3.1 million households.
Signs of improvement can also be seen when we compare growth in the median renter income to growth in the median rent. The chart below shows that the median renter income grew faster than the median rent for the sixth straight year.
At last, Apartment List explored the relationship between income growth and cost-burden increase. Below is a chart that demonstrates that when income growth outpaces rent growth, cost burden rates will tend to fall. In the Triangle, income has been growing faster than rents, due to the booming job market in the area, which in turn affects the cost burden rate in the Triangle. Large technology companies and vast job opportunities in science and academia make the Research Triangle surrounding Raleigh appealing to new Science, Technology, Engineering and Mathematics (STEM) grads. Combined with relatively low housing prices, the Triangle is the next go-to destination for tech workers around the nation. Despite rapidly increasing rent prices, Raleigh, Durham and Chapel Hill are still more affordable than most tech centers.
A lack of affordable housing in areas of economic opportunity remains one of the most pressing issues. Households that struggle to pay rent oftentimes have to cut back other basic necessities, which can result in adverse and long-lasting consequences. While the data do show some improvement, there is still much left to accomplish to ensure that everyone can comfortably afford a place to rest their head.
It’s important to understand what is involved in renting your home, especially if you haven’t done it before. Don’t let that deter you, or intimidate you! A great property management company is an important part of
the equation, and Real Estate Experts has the knowledge and expertise to help you handle all of the details.