https://www.newsbreak.com/news/34349...-almost-80-000

5 years ago renters needed to make less than $60,000 a year to afford the typical rent; now they need to make almost $80,000

"To be rent burdened means you’re spending more than 30% of your income on housing, and to be severely rent burdened means you’re spending more than 50% of your income on housing. A recent report by Harvard University’s Joint Center for Housing Studies analyzing 2022 Census data, found a record-high of more than 22 million renter households spent more than 30% of their income on rent and utilities. And slightly over 12 million spent more than half of their income on housing costs (another all-time high).

Last year, rental prices softened because of a multifamily construction boom. But then rents began to slowly climb again. Still, the share of median household income spent on typical rent was 29.2% in April, down from a recent peak of 30.3% in June 2022 but still well above the 27.6% needed before the pandemic, Olsen wrote.

We always talk about home prices skyrocketing during the pandemic-fueled housing boom, but rents did too. Since the start of the pandemic, rents have increased by 31.4%, according to Zillow; and they’re up 3.6% from last year. Let’s break it down a little more: single-family rents have risen 38.3% since the start of the pandemic, while multifamily rents have increased by 25.1% during the same period.

So the typical rent for a single-family home is $2,208, as of April, and $1,862 for a multifamily home. And all rents fell in only one major metropolitan area on a monthly basis. On an annual basis, rents rose in 48 of 50 major metropolitan areas, increasing as much as 7.7% in one city: Providence.

The most affordable metropolitan areas for renters versus the least affordable might not surprise you much. Salt Lake City, Minneapolis, St. Louis, Austin, and Raleigh are some of the most affordable places to rent, given their share of income spent on housing is all around 20%. Meanwhile, the least affordable are the usual suspects: Miami, New York City, Los Angeles, Riverside, and San Diego (all of which exhibit more than 30% of local median household income spent on typical rent).

But as mentioned earlier, home prices soared during the pandemic, and have generally continued to do so, but mortgage rates have also shot up, which is why renting is still considered cheaper than buying. It’s hard to believe because renting is by no means affordable, especially in metropolitan areas such as Los Angeles and New York City, but when you compare it to monthly mortgage payments, it is “cheaper.” Some say home prices have risen roughly 50% since the start of the pandemic, and others say the salary you need to buy a starter home has almost doubled since the pandemic. And if Capital Economics’ property economist, Thomas Ryan, is correct, renting will be cheaper than buying for years.

But that may not offer much relief, especially in the more expensive cities. For example, the median rent in New York City is $3,520, or 68% higher than the national median and 39.8% of the average household’s income.

By comparison, the average home value in New York City is almost $750,000, and the average 30-year fixed mortgage rate is 7.15%, so your monthly mortgage payment (after a 20% down payment) would be $4,052. And that’s not including taxes or insurance or any other associated cost. So to rent or buy? Both seem to be severely unaffordable."