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Are You Spending TOO Much On Rent?

Posted by David E. DeChant on Tuesday, October 30th, 2018 at 9:00am.

Chances are if you are renting you are spending too much of your income on your monthly housing expense. There is a long-standing ‘rule’ that a household should not pay more than 28% of their income on their rent or mortgage payment. This percentage allows the household to save money for the future while comfortably covering other expenses.

According to new data released from ApartmentList.com49.5 million renters in the United States were cost-burdened in 2017, meaning they spent more than 30% of their monthly incomes on rent. This accounts for nearly half of all renter households in the country and is up 3.1 million from 2007.

When a household is cost-burdened by their monthly housing expense, they are not as easily able to save money for the future. This is a big factor for many renters who dream of owning their own homes someday.

But there is hope for those who are able to save at least a 3% down payment! The percentage of income needed in the US to buy a home is significantly less than renting at 17.1%!

The chart below compares the historic percentage of income needed to rent and buy from 1985-2000 to the first quarter of 2018. As you can see, the cost of renting has climbed above historic numbers while the cost of buying dropped over the same period of time.

Bottom Line

If you are one of the many renters who is spending too much of their monthly income on rent, consider saving money by getting a roommate, moving into a less expensive apartment, or even moving in with family. These are all ways to save for a down payment so that you can put your housing costs to work for you! Talk to a REDCO Agent today!

 

 

Source: https://www.keepingcurrentmatters.com/2018/10/30/are-you-spending-too-much-on-rent/ 

3 Responses to "Are You Spending TOO Much On Rent?"

Taking Fear Out Of The Mortgage Process wrote: [...]Links

Are You Spending TOO Much On Rent?
Thinking Of Selling Your Home? Here’s Why You Need A Pro In Your Corner
[...]

Posted on Wednesday, October 31st, 2018 at 10:12am.

How Will Home Sales Measure Up Next Year? wrote: [...]Links

Taking Fear Out Of The Mortgage Process
Are You Spending TOO Much On Rent?
Thinking Of Selling Your Home? Here’s Why You Need A Pro In Your Corner


[...]

Posted on Thursday, November 1st, 2018 at 10:31am.

The Difference An Hour Will Make This Fall [INFOGRAPHIC] wrote: [...]Home Sales Measure Up Next Year?
Taking Fear Out Of The Mortgage Process
Are You Spending TOO Much On Rent?




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Posted on Friday, November 2nd, 2018 at 10:03am.

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