While rents are less affordable than ever, monthly mortgage payments are still within reach of people making the median income in most places.
It’s getting harder for people to afford rents, but paying a mortgage is still more affordable on a monthly basis than it was in the years before the housing crisis.
Zillow’s newest affordability report found that rents hit their least-affordable point to date in the second quarter of 2015. U.S. renters can now expect to spend 30.2 percent of their monthly income on rent payments.
In certain markets, the problem is even worse. Renters in high demand markets like Los Angeles, San Jose, Miami and San Francisco can expect to spend more than 40 percent of their monthly income on rent — up over 10 percentage points from historical norms.
Meanwhile, mortgages continue to be affordable for many. Buyers now should expect to spend 15.1 percent of their income on a mortgage payment. In the years before the real estate bubble and burst, borrowers could expect to spend around 21.3 percent of their monthly income on a mortgage payment.