Rents Rising as More Americans Can’t Afford to Buy
Purchasing a home remains unaffordable for many Americans despite continued declines in home prices and record low mortgage rates. And in the search for affordable housing, many consumers are relying on an already strained apartment market for temporary accommodation, as housing advisers urge Congress to implement government-backed rental assistance. The income needed to purchase a median-priced home dropped in 93% of the markets studied by the Center for Housing Policy – the research affiliate to the National Housing Conference, an advocate for policies that promote affordable housing. Yet, despite the drop, many Americans still do not earn enough to own a home. The study compared and ranked the costs of buying or renting a home in more than 200 US metropolitan areas with the salaries of more than 60 jobs. Consumers are renting more, according to the survey, but the typical rent for a two-bedroom home rose in 89% of those markets to meet the demand. The rise in rents and drop in homeownership costs are most noteworthy in Florida, where the income needed to buy a median-priced home fell more than 20% in 12 metro markets. Meanwhile, two-bedroom rents rose across all of the Florida markets by nearly 6%. And with deal-home prices rising, for instance foreclosures hovering near record heights, distressed consumers are finding refuge in the apartment sector. In reaction, Bob DeWitt, CEO of GID Investment Advisers testified to Congress yesterday on behalf of the National Multi Housing Council (NMHC), that government support is needed for the apartment industry. He warned lawmakers not to create a capital shortage for the lower-profile sector as they contemplate ways to reduce taxpayer exposure to the secondary market. “This is important,” he said, “because the nation is increasingly relying on apartments as fundamental changes in our society are changing the types of housing we need to build. Housing expert Professor Arthur Nelson of the University of Utah projects that half of all housing built over the next 10 years will need to be rental housing to meet the dramatically changing landscape of demand.” Write to Jon Prior.