Seattle Renters feel the squeeze
According to new analysis from economists at Zillow, the online housing marketplace, the average renter is spending about 30 percent of their take-home pay just to keep a rented roof over their head.
Seattle's rent affordability is worse than the national average, adding to a housing affordability crunch that Zillow said also includes home buying affordability. Currently, with mortgage interest rates under 4 percent, Seattle homeowners spend about 21 percent of their monthly income on mortgage payments. If rates were to spike to 5, 6 or 7 percent, Seattleites will spend about 30 percent of their pay on monthly mortgages.
In its new analysis on rental costs, Zillow said the median U.S. household would historically need to spend 24.9 percent of their income to afford the rent on the median property. Currently that number stands at 29.6 percent. That means that renters across the nation are currently spending almost 19 percent more of their incomes on rent than they did in the pre-bubble period between 1985 and 2000.
But while rental prices have become increasingly less affordable in the Emerald City, things could be worse. In cities such as Los Angeles, Miami and San Francisco, the average household would need to spend more than 40 percent of their income to rent the average home.
Nationally, the share of income that households must devote to rent has increased steadily and consistently since 2000, as the increase in rent has dramatically outpaced the growth in income over the same period. Over the period from 2000 to 2014, median household income has increased by 25.4 percent, while rents have increased over 52.8 percent more than twice as much. With new data that shows just how unaffordable home purchases have become for many potential buyers, housing affordability has become a dramatic economic issue for many people looking for housing.