Dive Brief:
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In most U.S. cities, homeowners spend less of their incomes on house payments than tenants spend on rent, according to a Zillow report released on Tuesday.
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Homeowners spend an average of 15.3% of their monthly incomes on their mortgage payments, while renters spend 29.9% of theirs on rent—without any guarantee that the price won’t increase over time.
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In Washington, DC, for example, tenants spend 27.1% of their incomes on rent, compared with 16.2% historically. In Miami, renters shell out 44.5% of their earnings for housing, up from 26.5% before the recession, Zillow reported.
Dive Insight:
The faster and higher rents rise, the quicker tenants will start trading their apartment leases for property deeds. The conundrum: The higher the rent-to-income ratio rises, the more difficult it becomes for tenants to scrape together the money they need for down payments and closing costs, a struggle that is keeping many out of the housing market.