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发帖数: 29846 | 1 Tenants Feel Pinch of Rising Rents
By CONOR DOUGHERTY
Record-low mortgage rates mean that homeowners have a smaller financial
burden for their residences than at any time since the early 1980s.
But here's the bad news: Rising rents are squeezing many families and
leaving them with less to spend.
Several factors have pushed rents up. Rental and apartment housing is in
short supply but demand has grown after several years of foreclosures and
population growth.
Across the U.S., "effective" monthly rent—which means the final amount paid
including discounts—averaged $1,044 in October, up 3.7% from a year ago,
according to Reis Inc., REIS -0.62% a real-estate data firm. Landlords no
longer have to "pony up in order to entice tenants," said Victor Calanog,
Reis's chief economist. He added that rising vacancies suggest rents are "
approaching equilibrium," but aren't likely to fall soon.
In the third quarter, the ratio of rent to after-tax mortgage payments was
107.8%, according to Deutsche Bank DBK.XE +0.82% . A rent-to-mortgage ratio
above 100 means mortgage payments are cheaper than rent for the median
homeowner. The ratio was down from an all-time high of 120.7% in the first
quarter, but well above an average of 85% since 1991.
The rising cost of renting is putting pressure on tenants at a time when
many are still grappling with slow or falling income growth. In the third
quarter, renters spent 24.12% of their disposable income on financial
obligations—things such as rent, debts and auto leases. That was the
highest level since early 2010, according to the Federal Reserve.
Jake Brumm, a 32-year-old electrician, is paying more than a third of his $
65,000 annual income on a $2,000-a-month house he rents in El Cajon, Calif.,
near San Diego. Mr. Brumm, who is married and has two children, lost his
home to foreclosure three years ago and says his credit is too tattered to
buy again. With so many people seeking rentals, landlords "have the upper
hand," he said.
"Right now you pretty much have to take what you can," Mr. Brumm added.
This contrasts with living costs for homeowners, which have fallen steadily
in recent years amid record low interest rates. During the third quarter,
homeowners, including those who don't have mortgages, spent 13.9% of their
disposable income on financial obligations, the lowest share since 1984,
according to the Federal Reserve.
Housing is just one of many costs in a consumer's annual budget. Gasoline
prices have been falling, inflation has remained in check, and low interest
rates mean lower monthly payments on auto loans and other debts.
Another factor causing rents to rise is lack of supply. During the housing
boom, developers focused on building single-family homes and condominiums.
While some of those properties are returning to the market as rental housing
, demand to buy new homes remains strong.
The scarcity is acute for lower-priced rental housing. "It's a lost decade
in terms of apartment construction," said Murtaza H. Baxamusa, director of
planning and development for the San Diego County Building Trades Council
Family Housing Corporation, which operates subsidized apartments in San
Diego.
Builders now are making up for lost time: Multifamily construction spending
rose to an annualized $23.8 billion in October from $15.6 billion a year
earlier. That has helped nudge vacancies upward: Apartment vacancies rose
slightly in October, to 4.7% from 4.6%, the first time they have risen since
the close of 2009, according to Reis.
In the long run, rising rents will encourage more families to buy.
That is what pushed Jeff Daniels and his wife, Alison, into the market. In
March the couple bought a Phoenix home for $105,000, lowering their monthly
housing cost to $600 for the mortgage and taxes from the $750 they were
paying in rent. Ms. Daniels, a 32-year-old stay-at-home mom, says they have
used much of the savings to set up house. They bought a new refrigerator, a
washer-dryer and now spend $80 a month on the yard.
"We ran a bunch of numbers," Ms. Daniels said, "and were like 'Why are we
even renting?'"
Write to Conor Dougherty at c*************[email protected] |
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