Too Damn High! Rent Rising Faster Than Wages
"A total of 21.3 million are spending 30 percent or more of their paycheck to cover the rent — also a record high," said CNN in a recent article.
As rent prices skyrocket in high-cost-of-living cities, like San Francisco and New York City, even supposed low-income-requirement cities like Detroit are seeing a rise in occupancy levels, which in turn leads to higher rent prices.
According to CNN's Kathryn Vasel, "In the 10 cities with the highest housing costs, renters with middle-class incomes are having a particularly hard time making ends meet. Nearly 75 percent of renters earning $30,000–$4,999 and 50 percent of those making $45,000–$75,000 living in these to markets are considered ‘cost-burdened’ – meaning they spend at least 30 percent of their income on rent."
Development options are changing too. Take the emerging stadium-district in Detroit, for instance. Fifty-six (56) loft units, 16 townhouses, 64 one-bedroom units — to name just a few apartment types — are being built in a $650-million-dollar private invested venture. Options like this are a draw to middle-aged people who are starting to opt for a rent payment over a mortgage. Forty (40) percent of renters fall within the 30–49 demographic.
As rent payments rise, younger people and low-income residents are being pushed to the side. Placed against the cost of a 15-year fixed mortgage, the real estate market may be in for a shakeup.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.