If you feel like the walls are closing in on you, you might be right. New apartments hitting the rental market in 2016 are 8% smaller than they were 10 years ago, according to a recent report from online rental marketplace RentCafe. Meanwhile, rents for all apartments on the market have risen 7% in the last five years. This year, the average square footage of all new apartments, including studios, one-bedroom and two-bedroom apartments, was 934 square feet. Just a decade ago, the new units coming online offered an average of 1,015 square feet. The national average for rent this year is $1,296 compared to $977 in 2011. Rent Affordability: A record number of Americans spend half their income on rentThe report analyzed data from buildings in the 100 largest U.S. cities that have at least 50 units. The biggest losers were new studio apartments, which have shrunk by nearly 18% since 2006 to an average 504 square feet this year. Read more.
Scammers often advertise rentals that don’t exist or aren’t available to trick people into sending money before they find out the truth. Scammers know that finding the right apartment or vacation rental can be hard work, and a seemingly good deal is hard to pass up. They’ve been known to game some vacation rental websites and bulletin boards. Here are some signs you may be dealing with a scam: They tell you to wire money They want a security deposit or first month’s rent before you’ve met or signed a lease They say they’re out of the country – But they have a plan to get the keys into your hands
If you can’t meet in person, see the apartment, or sign a lease before you pay, keep looking. What if the rental itself is overseas? Paying with a credit card or through a reputable vacation rental website with its own payment system are your safest bets. If you find yourself the target of a rental scam, report it to your local law enforcement agency and to the FTC. Read more.
It’s been said many times: The rent is too high. And now a recently introduced bill is trying to cut renters a break—a tax break, that is. The bill, if it became law, would allow renters to deduct from their federal taxes what they pay for the primary roof over their heads—a proposal that could save them thousands per year. “There’s an unequal treatment now of owners and renters,” says Rep. Alan Grayson, a Democrat from Florida, who introduced the bill. He hopes this bill would level the playing field. For example, the average taxpayer shelling out about $1,500 a month (or $18,000 a year) could potentially save $4,500 annually through the deduction if he or she is in the 25% tax bracket, he says. “Renters should be able to share in the tax savings,” he says. “This is a tax benefit that would go primarily to people who need it.” About 37% of U.S. households were renters in 2015, according to a recent report from the Joint Center for Housing Studies of Harvard University. And 49%, or 21.3 million, of renters were considered cost-burdened (that is, they plunked down more than 30% of their paychecks on housing) in 2014. Meanwhile 26%, or 11.4 million, were severely cost-burdened, shelling out more than half of their earnings each month. Read more.
WSJ.com – Nick Timiraos
Home prices and mortgage rates have fallen so far that the monthly cost of owning a home is more affordable than at any point in the past 15 years and is less expensive than renting in a growing number of cities. The Wall Street Journal’s third-quarter survey of housing-market conditions in 28 of the nation’s largest metropolitan areas found home values declined in all but five markets compared with the second quarter, according to data from Zillow Inc. Meanwhile, rent levels have risen across the country and mortgage rates, hovering around 4%, are the lowest in six decades. As a result, monthly mortgage payments on the median priced home—including taxes and insurance—are lower than the average rent levels in 12 metro areas.
It remains less expensive to rent than to buy in 15 cities including Detroit, Minneapolis, Orlando, Las Vegas, Miami, St. Louis, Chicago and Phoenix. Even cities where it is cheaper to rent than own have seen boosts in affordability. Mortgage rates are a big reason why affordability continues to improve. But at the same time, low mortgage rates aren’t spurring sales because few analysts expect rates to rise anytime soon. The Federal Reserve in August said it would keep rates at ultralow levels for two years.
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CAR.org: This year California housing market conditions make a strong and compelling case for homeownership. With prices still well below the historic highs of just a few years ago and attractive mortgage rates, qualified buyers have a unique opportunity to own their own home. As seen below, a rigorous analysis of renting versus buying hears this conclusion out. As shown in the following chart, the monthly housing costs (principle, interest, taxes, and insurance or PITI) associated with buying a median-priced home of $301,430 is $1,590 (Fourth Quarter 2010 median priced home in California). This assumes the buyer is making a 20 percent downpayment and financing with a 30-year fixed rate mortgage at 4.62 percent. In comparison, the median rent on a three-bedroom two-bath apartment with renter’s insurance in California is $1,810. That means buying a home would save the homeowner $220 per month when compared to renting and the homeowner would save over $2,600 a year.