Rental Costs Eat Up 70% – Chuck Barberini Real Estate

Chuck Barberini Real Estate – Barberini Robinson Real Estate – Contra Costa County Real Estate

Rental Costs Eat Up 70% – Chuck Barberini Real Estate


We are seeing this every day, but it is exceptional brutal in our current market. Rent is higher than most mortgage payments, but getting into a house these days is extremely difficult, lack of inventory has pushed up house prices and the completion from first time buyers and investors looking to take advantage of the increased rents make it extremely difficult for buyers. Check out this article that was in today.

Soaring rental costs are taking a big dent out of some renters’ paychecks, and creating hardships for entry-level employees in particular.

Read moreWhy Renters Can’t Make the Move

In New York City, the average entry-level employee earns $47,000 per year. That means affording the rent of an average one-bedroom apartment at $3,000 per month will take up 77 percent of the average employees’ monthly income, according to RadPad, which recently analyzed more than 150,000 apartment listings to judge affordability for entry-level employees. In San Francisco, employees’ have 79 percent of their incomes eaten up by rental costs – the highest percentage in the nation of any metro studied.

Renters in Houston have it easier. Houston renters spend 29 percent of their incomes on rents, which falls under the 30 percent threshold that most financial planners say is healthy for a budget.

Here are 10 popular cities ranked from highest to lowest in terms of the percentage of starting monthly income that goes towards rent:

  1. San Francisco: 79%

    For Rent
    For Rent
  2. New York City: 77%
  3. Los Angeles: 61%
  4. Boston: 56%
  5. Seattle: 51%
  6. Chicago: 47%
  7. Orlando: 44%
  8. Atlanta: 36%
  9. Austin: 36%
  10. Houston: 29%

Source: “An Entry-Level Salary Is Barely Enough to Make Rent in These Cities,” (May 11, 2016)

Rates improved today upon the release of weaker than expected economic news. 

Mortgage Rates and Market Data

Rental Costs Eat Up 70% – Chuck Barberini Real Estate

A Troubling Shortage of Homes – Chuck Barberini Real Estate

A Troubling Shortage of Homes – Chuck Barberini Real Estate

 Chuck Barberini Real Estate – Contra Costa County Real Estate

We all see it. The rapid increase in home prices, especially in the Bay Area. Interest rates remain low, but so does inventory. Younger buyers and first time buyers continue to have a difficult road to home ownership. To make matters worse rents continue to rise and rental inventory continues to decline making the frenzy around rental properties equal to or greater then multiply offer, over asking price scenarios that continue to take place in the house buying market.

Check out this article by Lawrence Yun that I found in that speaks to the current home buying market. Good Luck, Chuck

Inflation may be in check, but the lack of inventory around the country is fueling a sharp rise in housing costs.mar16_NC_economy

There is no inflation, says the federal government. The consumer price index rose by only 0.4 percent in 2015 so there will be no cost-of-living adjustment to Social Security checks this year. However, as most real estate professionals know, housing costs are still climbing. Rents rose at their highest pace in seven years and home prices nationally increased by 6 percent. That would be three times the pace of average wage growth. Housing costs are expected to keep rising in 2016 simply because not enough homes are being built.

From 2009 to today, new construction of single-family homes, condominiums, and apartment units totaled 5.6 million. Over the same period, approximately 1.7 million housing units were deemed uninhabitable or obsolete and were demolished and removed from the housing stock. These two figures result in a net addition of 3.9 million housing units to the country’s stock. Is that adequate in light of 17.3 million additional people living in the country over the same period?

Clearly, the answer is no. Given the average household size of 2.5 persons, a total of 6.9 million new housing units would be needed to accommodate the country’s rising population. The 3.9 million units that were actually created fall far short of the demand—by some 3 million homes.

That explains why rental vacancies are falling and housing inventories are shrinking. Of course, local market conditions vary. States with declining populations, including Connecticut, Illinois, and West Virginia, may have a less pressing need for additional home construction. But those places are exceptions. Housing shortages are the rule in most states and there’s no reason to expect anything to change this year.

There are essentially two major consequences of a persistent housing shortage: a continuing steep rise in housing costs and people needing to double or triple up to afford a home. Young adults may have to find multiple roommates or else live with their parents.

That latter scenario is probably not what most young people dream about, but it’s what the American dream of home ownership could turn into if we don’t spur more housing development in the country soon.


Mortgage Rates and Market Data

Chuck Barberini – Barberini Robinson Real Estate Group

A Troubling Shortage of Homes – Chuck Barberini Real Estate