How much do you need to earn to afford to rent a 2 bed apartment?

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A new report by the National Low Income Housing Coalition finds that it is getting harder and harder for average Americans to afford a modest rental.

In 2016, a worker would need to make $20.30 per hour to rent a two-bedroom accommodation comfortably—without devoting more than 30 percent of income on housing costs. Last year, NLIHC pegged this “housing wage” at $19.35 per hour. The actual average hourly wage is $15.42.

The report highlights the difference in each State between the actual hourly earnings and that needed to afford a 2 bed rental.

This is the summary for Massachusetts: (more…)

Home Prices are rising, but so are Rents

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Quite often I read articles about home ownership “affordability” suggesting that rising home prices are making home ownership more difficult for many people. Yet these articles rarely if ever point out that the alternative to home ownership – renting – is also seeing rising prices.

This Bloomberg article Your rent’s about to get even higher points out that

Source: US Census Bureau, Bloomberg

Source: US Census Bureau, Bloomberg

Rising rent = more of your money being paid to the person who owns the home in which you live, while that person benefits from any increase in the home’s value

Rising home prices = an increase for you in the value of your home if you own it.

So who do you want to help make money – you or your landlord? (more…)

Will baby boomers kill the housing market?

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Will a flood of baby boomers cashing out their home equity be too much for the housing market to bear? That is the question I was asked recently.

One of the difficulties in trying to make personal decisions, like whether to buy a house today in the town of your choice, based on long-term, national forecasts (for example, boomers cashing in their housing chips) is the risk of missing out on a lot of known positives – i.e., home ownership – in fear of unknown possible negatives.

But let’s look at some of those big questions. See also 4 reasons home prices will keep going up . (more…)