REAL ESTATE TOPICS...CHARACTERISTICS OF HIGH-BURDEN AND LOW-BURDEN RENTING HOUSEHOLDS

CHARACTERISTICS OF HIGH-BURDEN AND LOW-BURDEN RENTING HOUSEHOLDS
Source: Zillow Research

A number of economic and societal forces have converged to push rent burdens toward historic levels in many of America’s urban areas, which has led America’s cities to experience an affordability crisis with the share of income renters should expect to pay on rent each month continuing to rise.

Making sense of the story

• Today’s influx of renters – many of whom likely would have opted to buy homes a generation ago – has led to tight supply, rising prices, and stark contrasts between the affluent and the struggling.

• Rents are generally somewhat lower for households with a high rent burden, but most of the differences between low and high rent-burdened households can be attributed to wide differences in household incomes.

• The median household income among households with the lowest rent burden is typically four to five times the median household income among households with the highest rent burden. In San Francisco, it is nearly six times higher.

• Among the households with the greatest rent burdens, upward of half of household income is routinely dedicated to rental payments. In Los Angeles, the share is even higher: The highest rent burden households dedicated 68 cents of every dollar they earn to rent.

• The median age among households with the lowest rent burdens was three-to-five years younger than households with the highest rent burdens.

• Adults aged 25 to 54 living in low rent burden households are much more likely to have earned a bachelor’s degree or higher than adults in high rent burden households.

• Between 20 percent and 50 percent of households with a high rent burden have children present.

BECOME A CALIFORNIA REAL ESTATE AGENT...CLICK LOGO TO VIEW OUR LIVE LECTURE SCHOOL

TALKING POINTS …

• Mortgage applications moved decidedly higher last week, continuing their strong stride into spring, with total volume increasing 4.6 percent sequentially, according to the Mortgage Bankers Association (MBA).

• Lynn Fisher, MBA's vice president of research and economics, commented, “This week's mortgage application survey falls right into line with recent indications that home sales – new, existing, and pending – are on the rise, as is consumer sentiment.”

• Mortgage applications to purchase a home rose 6 percent week to week and were 8 percent higher than one year ago. Applications to refinance, which are more dependent on interest rate levels, rose 4 percent for the week and are 44 percent higher than they were one year ago.