Rental costs are rising at a faster pace than household income growth in many U.S. cities and that is making it harder for renters to save money for a down payment and become homeowners, according to a new study by the National Association of REALTORS® (NAR). In fact, in the last five years, typical rents rose 15 percent while the average wages of renters rose by only 11 percent, said NAR Chief Economist Lawrence Yun. Read the news release.
“The gap has worsened in many areas as rents continue to climb and the accelerated pace of hiring has yet to give workers a meaningful bump in pay,” he said.
In the New York metro area, rents have jumped more than 50 percent since 2009 while incomes rose around 8 percent. There was less disparity in the Chicago metro area with rents rising 12.92 percent and renter incomes rising 12.20 percent during the same time, according to NAR’s breakout of 70 metro areas. Yun said one way to ease housing costs is for new home construction to pick up and provide entry-level buyers with more housing options.
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