NEW YORK–It isn’t just the cost of homes that has been rising beyond the means of many Americans; rent continues to increase, as well.
New government data show that in May, for the second month in a row, the annual rise in rental income approached 4%, nearly four times the overall inflation rate of just 1% for the last 12 months, CNBC reported.
“The surge in rental prices has eased a bit in recent months, but the forces driving rents higher remain in place, according to a recent analysis by real-estate-market researchers at Trulia. Simply put: It's gotten harder in the last four years for many renters to buy a house, even though homeownership turns out to be a better deal in many markets around the country.”
The Trulia data show that over the last four years, while the supply of pricier homes has increased, the number of starter homes on the market dropped by 44%, the company said in its last quarterly inventory report. During the same period, the number of midrange "trade-up" homes on the market fell by 41%.
Trulia said the median starter house consumes about 38% of the typical first-time homebuyer's income, up from 32% four years ago, Trulia estimates.
Trulia reported the homeownership rate, which peaked in the second quarter of 2004 at 69.2%, has been falling since the housing market collapsed in 2007 and currently stands at just 63.5%.
The inventory squeeze for first-time buyers is playing out unevenly around the country. Eight of the 25 tightest markets among the 100 largest metro areas are in California. In Denver, Colo., starter-home inventories have fallen by 77% in the last four years, while the median price for that range of home jumped 78%, according to Trulia's analysis.