Folks on the West Coast have it especially bad.
Strong demand for rental units has given landlords leeway to jack up apartment prices and they’ve certainly done so. Americans are now spending more on rent than they ever have before.
According to a new report from Zillow that tracked data going back to 1979, rents hit their least-affordable point to date in the second quarter of this year. U.S. renters can now expect to spend 30.2% of their income each month on rent payments.
Some renters on the West Coast have it even worse. People in Los Angeles, San Jose, and San Francisco can expect to dedicate more than 40% of their monthly income on rent, that’s 10 percentage points above historical norms. The same goes for renters in Miami.
The news is better for prospective home owners. Mortagages continue to remain relatively affordable. Homebuyers should expect to spend 15.1% of their income on a mortgage payment. That’s down from the 21.3% they paid prior to the real estate bubble and burst.