According to CoreLogic’s recent Single-Family Rental Index (SFRI), housing affordability is not just an ownership problem.
Nationally, the monthly cost to rent a single-family home jumped +36% in December 2018 compared to December 2005. Meanwhile, the typical mortgage payment was down -4% during this same time period. (Mortgage payments in December 2005 averaged 6.3% or $941/month for a median priced home of $190,000; mortgage payments in December 2018 averaged 4.6% or $904/month for a median priced home of $220,305.)
Of the 12 large metro markets CoreLogic analyzed for the SFRI, sever of these markets had rent increases ranging from +27%-61% between 2005 and 2018. Concurrently, these same markets posed declines in typical mortgage payments from -3%- -24%. The remaining five markets all experienced rent and mortgage payment increases but the rent increases were greater.
Isolating the data to just 2018, rents increased +3.1% y/y and typical mortgage payments increased +12.1 percentage points with monthly principal and interest mortgage payments rising faster than home prices.
According to the latest US Census Bureau data,
- 27% of mortgaged homeowners were “cost burdened”
- 46% of renters were “cost burdened”
CoreLogic defines “cost burdened” as paying more than +30% of net income to monthly mortgage/rental payments and other housing expenses.Renter
