The Federal Reserve carried out its first hike of 2018 on Wednesday, increasing interest rates one-quarter percentage point and leaving open the possibility of more raises this year. The action was anticipated by the market, which has been on a robust—and, at times, rollercoaster—run.
“In view of realized and expected labor market conditions and inflation, the [Federal Open Market] Committee decided to raise the target range for the federal funds rate to 1-1/2 to 1-3/4 percent,” according to a Fed statement. “The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.”
The decision is the first under Fed Chair Jerome Powell, and follows growing wages and a heaping of jobs introduced to the labor pool.
Analysts are divided on exactly how many increases will occur this year. Many expect the Fed to limit it at three; others, accounting for inflation pressures and the recent stimulus, are entertaining the idea of four.
What does the hike mean for mortgage rates? Borrowing costs can grow. According to Freddie Mac, the average 30-year, fixed mortgage rate last week was 4.44 percent—a dip from the prior week, but nonetheless on a tear. Affordability has lessened as a result.
“The tight labor market will hurry-along the Fed to raise rates,” Yun said. “Housing costs are also rising solidly and contributing to faster inflation. The one thing that could slow the pace of rate increases would be to tame housing costs through an increased supply of new homes. Not only will more home construction lead to a slower pace of rate hikes, it will also lead to faster economic growth. Let’s put greater focus on boosting home construction.”
The Fed will meet next in June.
Source: Suzanne De Vita, RISMedia.com
This year’s tax season is bringing to light taxpayer confusion surrounding The Tax Cuts and Jobs Act of 2017, which could impact homeowners in next year’s tax filing. The IRS is taking steps to clarify what the new provisions mean for the real estate industry and homeowners.
One of the most misunderstood provisions in the new tax law expires in 2026 and prohibits the deduction of interest paid on home equity lines of credit and home equity loans except when the funds are used to substantially improve the taxpayer’s home. The IRS recently issued a statement clarifying that the deduction has not been removed, but is instead available under new home improvement restrictions:
“…despite newly-enacted restrictions on home mortgages, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC) or second mortgage, regardless of how the loan is labelled,” according to an IRS release.
National Association of REALTORS® (NAR) President Elizabeth Mendenhall commended the IRS on its efforts to clarify how homeowners can take advantage of the HELOC tax provision.
“The National Association of REALTORS® is pleased with the IRS announcement clarifying and confirming that under the new tax law owners can continue to deduct the interest on a home equity loan, line of credit or second mortgage when the proceeds are used to substantially improve their residence,” said Mendenhall in a statement. “There has been much confusion on this issue, and the continued deductibility will bring real benefits to those who choose to take on remodeling projects to bring more resale value to their home or gain equity that may have been lost during the downturn.”
“The National Association of Home Builders (NAHB) applauds [this] announcement by the IRS clarifying that households can take a tax deduction on a home equity loan or home equity line of credit if the loan is used for home improvements,” said Noel in a statement. “This is a major victory for remodelers and for homeowners who want to invest in their homes. NAHB has been pushing hard for this outcome since December, when The Tax Cuts and Jobs Act of 2017 was signed into law. We will continue to work with Congress and the Administration as they hammer out the details of the new tax law.”
Source: Liz Dominguez, rismedia.com
Confidence in housing is breaking new records, soaring in January in the Fannie Mae Home Purchase Sentiment Index® (HPSI). The HPSI overall posted 89.5 in January, 3.7 percentage points higher than the month prior and 6.8 percentage points higher than the year prior.
The ascent can be attributed to homeowners recognizing sale value, says Doug Duncan, chief economist and senior vice president at Fannie Mae. Moreover, prices are rising steadily, and the belief that they will continue to do so is tracking up.
“HPSI rebounded from last month’s dip to a new survey high in January, in large part due to the spike in consumers’ net expectations that home prices will increase over the next year,” Duncan says. “Results may continue to fluctuate over the coming months as consumers sort out the implications of the newly passed tax legislation on their household finances. Over the past year, continued home price growth has helped spur a sizable increase in the net share of consumers who say it’s a good time to sell a home, but also a modest weakening in the net share who say it is a good time to buy.”
The HPSI is derived from Fannie Mae’s National Housing Survey® (NHS).
Source: Fannie Mae
Getting a mortgage today is much different than it was before the financial crisis.
Loans have to meet certain standards and there are many rules lenders and servicers have to follow. But after a shakeup in leadership at the Consumer Financial Protection Bureau (CFPB), the future of some policies is uncertain.
Here’s why: The new acting director of the CFPB, budget director Mick Mulvaney, is expected to review regulations that haven’t been finalized, and he may try to alter rules that are already in place.
Here are three policies Mulvaney could change and what adjustments to them might mean for homeowners and homebuyers. The CFPB has already announced plans to reconsider certain rules.
Home Mortgage Disclosure Act
When you apply for a mortgage, some information—including your race, ethnicity and sex—could be released to the public.
For thousands of lenders, reporting mortgage information is mandatory under the Home Mortgage Disclosure Act (HMDA). While the law has been around since 1975, the amount of data made publicly available is increasing, and not everyone is thrilled.
The mortgage industry believes that publishing so much data raises concerns about consumer privacy. And there’s no way to opt out of having your information shared, notes Richard Andreano Jr., partner at the Ballard Spahr law firm.
“They expanded the data set so much that there was a concern that if it was all made public, at what point are borrowers able to be identified using HMDA data?” asks Alexander Monterrubio, director of Regulatory Affairs at the National Association of Federally-Insured Credit Unions (NAFCU).
Consumer advocates want more information released. Doing so, they argue, protects borrowers from discriminatory lending. It also holds lenders accountable for their actions, says Jaime Weisberg, senior campaign analyst at the Association for Neighborhood & Housing Development (ANHD).
The latest HMDA requirements went into effect Jan. 1, 2018, but the CFPB, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency announced that lenders won’t be penalized for mistakes made while collecting data in 2018 or reporting it in 2019. They also won’t have to resubmit data unless errors are “material.”
The CFPB also said that it would revisit certain aspects of HMDA.
“HMDA could be made almost worthless,” says Peter Smith, a senior researcher at the Center for Responsible Lending. “We need a good body of rules to make sure lenders are playing a fair game with consumers.”
Ability-to-Repay and Qualified Mortgage Standards
Another rule that has been subject to debate is the qualified mortgage (or ability-to-repay) rule implemented in 2014. It requires most lenders to make a “good faith effort” to determine whether someone can afford a mortgage and eventually pay it back.
Critics say the new standards have kept many people, including low-income individuals, from becoming homeowners.
The CFPB is obligated to review the ability-to-pay rule since the Bureau is required to assess existing regulations within five years.
With the CFPB’s change in leadership, there may be pressure to loosen lending requirements, says Barry Zigas, director of Housing Policy at the Consumer Federation of America. There’s already a Senate bill aiming to give qualified mortgage status to loans offered by many banks and credit unions without requiring the lender to meet every condition under the ability-to-repay rule.
The bill’s supporters say it would give more consumers access to mortgages. But Zigas calls it a “dangerous effort to undermine consumer protections.” If it passes, a financial institution may legally avoid going through all of the steps lenders take to ensure borrowers can repay their loans, like considering their debt obligations, verifying income and employment history, and calculating their monthly debt-to-income ratio
In 2015, the CFPB combined the mortgage disclosure obligations required by the Truth in Lending Act and the Real Estate Settlement Procedures Act under the TILA-RESPA Integrated Disclosure (TRID) rule. One result of the TRID rule is that consumers preparing to close on a house have two documents explaining their closing costs and mortgage terms, rather than four.
While the new forms helped simplify the closing process for homebuyers, the TRID rule created other problems. For one, it could prevent buyers from closing on their homes as quickly as they want to, says Brandy Bruyere, vice president of Regulatory Compliance at NAFCU.
For many items on the disclosures, there’s little or no tolerance for last-minute changes, and lenders have had to choose between rejecting borrowers’ requests and eating additional fees.
The CFPB has worked to fix the TRID rule and clear up confusion for lenders. But it hasn’t addressed every issue, leading members of Congress to create a bill that would make additional adjustments.
“The TRID disclosures are solid, and any significant change would add additional costs and uncertainty to the closing process,” says Smith from the CRL.
Rules Won’t Change Overnight
The CFPB’s final rules can’t be modified without issuing a notice and asking the public for feedback. Take these steps to ensure your voice is heard, especially if you’re concerned about how rule changes could affect you.
Comment on any potential policy changes. When the opportunity arises, visit the CFPB’s website and comment on the rules the agency is proposing. “The CFPB doesn’t have to do what the comments say, but they have to provide a reason for not doing so to avoid the rule being struck down as arbitrary and capricious,” says Benjamin Olson, a former deputy assistant director for the Office of Regulations at the CFPB.
Contact your representative. Congressional leaders can review certain rules issued by the CFPB and potentially overturn them. That’s what happened with the CFPB’s arbitration rule. The policy would’ve made it easier for consumers to file class action lawsuits against banks, but lawmakers used their powers under the Congressional Review Act to kill it before it could take effect. Legislators are now considering the CFPB’s final rule on payday lending and may seek to repeal it.
Use the complaint database. If you’ve had issues with your mortgage lender or servicer and you’re having trouble resolving them, file a complaint with the CFPB. Typically, you’ll receive a response within 15 days. You can use the same database if you’re having problems with other financial entities, like the bank managing your checking or savings account.
If you’re looking at mortgage rates and preparing to buy a home for the first time, read reviews and do your homework before choosing a lender.
Source: rismedia.com, by Amanda Dixon
A banner year.
Another $2 trillion was added to the housing market in 2017, brought to a collective $31.8 trillion, according to a recently released report by Zillow. On an annual basis, home values increased 6.5 percent last year; values last expanded at a faster pace—8 percent—in 2013.
The additional $2 trillion, put another way, doubles Apple’s recent $900 billion valuation.
“This was a record year for home values, as the national housing stock reached record heights in 2017,” says Aaron Terrazas, senior economist at Zillow. “Strong demand from buyers and the ongoing inventory shortage keep pushing values higher, especially in some of the nation’s booming coastal markets.”
Los Angeles, New York and San Francisco were the most valuable major markets last year, at $2.7 trillion, $2.6 trillion and $1.4 trillion, respectively. No other exceeded $1 trillion. Columbus, Ohio, grew at the quickest pace, 15.1 percent, followed by San Jose, Calif., at 13.5 percent, Dallas-Fort Worth, Texas, at 12.3 percent, Seattle, Wash., at 11.7 percent, and Tampa, Fla., at 11.3 percent.
More than $485 billion, meanwhile, was spent on rent in 2017, the report shows. The figure is a 1 percent, or $4.9 billion, increase from 2016.
“Renters spent more than ever on rent this year, but the amount they spent grew at the slowest pace in recent years as more renters transitioned into homeownership and new rental supply slowed rent growth across the country,” Terrazas says.
According to Terrazas, housing this year is likely to maintain the status quo, even with changes to the tax code.
“Despite recent changes to federal tax laws that have historically made homeownership financially attractive, the long-term dynamics pushing up home values and rents are unlikely to change significantly in 2018,” Terrazas says.
A new year has started, and with it a newly enacted tax policy: the Tax Cuts and Jobs Act. While most changes will not be noticeable until consumers file their taxes in 2019, the new tax law stands to alter how consumers view homeownership incentives and could impact real estate markets across the country. Additionally, many consumers, but not all, may see a change to their paychecks by next month due to the new tax rate deductions. These are the biggest real estate-related tax policies and how they could affect homeowners.
1. Cap on Mortgage Interest Deduction
The Tax Cuts and Jobs Act reduced the limit for the mortgage interest rate deduction for new loans starting Dec. 15 to $750,000. Loans that were taken out before this date are grandfathered into the previous tax policy, which featured a $1 million cap on the deduction. Homeowners can refinance their existing mortgage balance up to $1 million while still being able to deduct the interest—the new loan cannot exceed the amount of debt being refinanced.
“Although only 1.3 percent of all U.S. mortgages are likely to be impacted by the capping of the mortgage interest deduction, it poses a risk to large urban areas with high-priced housing stock,” says realtor.com® Senior Economist Joseph Kirchner, Ph.D. “The No. 1 area with the greatest risk to its home prices and sales is Washington, D.C., followed by California, Hawaii, Massachusetts and New York.”
Some tax experts state that the overall impact of these changes will not be seen until current homeowners sell, in which case the purchased property would come under the new regulations.
“Most estimates suggest that by limiting some buyers’ purchasing power, capping the deduction could contribute to slower home value growth in the priciest communities, moderating the gains longtime homeowners can expect when they do eventually sell,” says Alexander Casey, Zillow Group Policy Advisor.
2. New SALT Deduction Limit
In the final bill, taxpayers can itemize deductions up to $10,000 for their total state and local property taxes and income or sales taxes. The cap is the same for both individual and married filers.
“Households that pay more than $10,000 in combined state and local taxes each year will be impacted by the new SALT limits,” Casey says. “On one hand, taxpayers who still itemize deductions and whose total state and local tax liability exceeds $10,000 will get a smaller tax break; however, for other households, the continued availability of those deductions, even if they are capped, may be the deciding factor between whether or not they itemize deductions. This matters a lot in areas where SALT deductions were a relatively more significant reason for itemizing—areas with lower home prices, but higher taxes (e.g., upstate New York, Southern New Jersey, Inland California).”
In the previous law, the SALT deduction was unlimited.
3. Preserved Exclusion of Capital Gains
This tax policy remains unchanged from the previous law, which stated that homeowners must live in their home for two out of the past five years in order to qualify for the exclusion.
“About 10 percent of home sellers last year sold their home after living in it between two and five years,” says Casey. “Keeping the status quo means these sellers no longer need to make that difficult choice, and can instead feel more free to list their home on a more flexible schedule without fear of a potentially hefty tax hit.”
The Senate bill proposed an increase to the residency requirement to five years of the past eight, but it did not pass to the final version.
“Today, homeownership is imperative for middle-class wealth-building and financial stability,” says Kirchner. “It allows people to invest in a long-term asset that pads their retirement savings, provides a safety net for unforeseen circumstances, and equity to back investment in education or small business. The survival of the capital gains exclusion means that the advantages of this type of investment will remain (except, of course, with regard to impact of changes to deductions).”
4. Deductibility on Home Equity Loans
The new law states that taxpayers will no longer be able to deduct interest paid on home equity loans beginning in 2018, unless the funds are being used to significantly improve the residence. This provision expires in 2026, when it reverts back to the previous cap of $100,000 of home equity debt.
“Deductible interest on home equity loans used to provide homeowners another layer of financial security by giving them the ability to obtain low-cost financing,” Kirchner says. “Now, without the ability to deduct interest, owners effectively will have to pay more for their loans, which could put downward pressure on the homeownership rate.”
Casey believes the removal of this homeownership incentive will not have a dramatic impact on the homeownership rate, but will affect home renovations instead.
“A lot of personal and economic factors matter more,” Casey says. “This deduction is more important for financing major home renovations, so eliminating this deduction could contribute to underinvestment in the housing stock, making it more difficult for struggling communities to reinvent themselves.”
5. Doubling of the Standard Deduction
In the previous law, the standard deduction for single taxpayers and married couples filing jointly was $6,350. This amount is nearly doubled in the new law to $12,000. For married couples filing jointly, the previous standard deduction was $12,700, which has been increased to $24,000.
“A doubled standard deduction will have a big impact on how many homeowners ultimately decide to take advantage of the mortgage interest deduction,” says Casey. “When you combine a much larger standard deduction, with the fact that some itemized deductions have been capped or pared back, many filers may no longer find it financially advantageous to itemize deductions.”
He adds that according to Zillow’s calculations, under the current tax code, itemizing and claiming the mortgage interest deduction is financially worthwhile on an estimated 44 percent of all U.S. homes. In addition, under the new law, itemizing and claiming the MID is worthwhile on only 14.4 percent of homes nationwide.
“The doubling of the standard deduction changes the equation for homeownership incentives and essentially renders the mortgage interest rate deduction ineffective for the majority of owners,” says Kirchner. “Until now, most households did not itemize their deductions until they bought a home, which added significant tax benefits to ownership. Based on the changes to the standard deduction, this benefit will disappear for all but those homeowners who have mortgages in excess of $550,000, depending on what other deductions they have.”
Location and Timing
The impact, however, will largely be based on where taxpayers are located. Those in high-cost states may see the biggest changes in how they file, especially with the new $10,000 SALT limit. According to Zillow Research, 51 percent of Americans surveyed last year said they agree with the statement that “the property tax rate in my community is unfair to me.” These sentiments may rise in response to residents of high-tax burdened markets receiving a higher tax bill because of the new limit.
For example, Zillow analysis conducted for the Wall Street Journal states that a top income earner in New York, who owns in the top-third price range of the metro, pays an estimated $23,000 in property and state income tax every year, which is double the amount now allowed for deductions. The analysis also reported $10,000 in similar circumstances for Raleigh, N.C., and $12,000 for a Chicagoan. These are just a few areas where high-earning taxpayers would be adversely impacted by the new SALT deduction cap. According to a Wall Street Journal article, Moody’s Analytics estimates that 80 percent of counties across the country will see a negative impact on home prices in the summer of 2019.
Low-tax states, however, may benefit from the new tax code. According to the WSJ, parts of North Carolina, Alabama, Nebraska, Indiana and Tennessee may see boosts in their home prices and local economies. And the same Zillow analysis that surveyed high property and income taxes in other states says an individual in a similar financial situation would pay one-quarter of the amount in Nashville, Tenn. For those that have been on the fence about moving, the tax overhaul may be the deciding factor. But those who live in high-tax states may not see the negative impact from taxes as reason enough to leave their homes.
According to NAR research, here are the five metro areas that will be most affected by the new tax law (based on homes with mortgages valued over $750,000):
- San Jose-Sunnyvale-Santa Clara, Calif.
- San Francisco-Oakland-Hayward, Calif.
- Santa Cruz-Watsonville, Calif.
- Santa Maria-Santa Barbara, Calif.
- Urban Honolulu, Hawaii
The top five metros based on share of owners that pay over $10,000 in real estate taxes:
- New York-Newark-Jersey City, N.Y., N.J., Pa.
- Bridgeport-Stamford-Norwalk, Conn.
- Trenton, N.J. Metro Area
- San Jose-Sunnyvale-Santa Clara, Calif.
- San Francisco-Oakland-Hayward, Calif.
“Only 6 percent of homeowners have mortgages exceeding $750,000, and only 5 percent pay more than $10,000 in property taxes, but most homeowners won’t itemize under the new regime,” said NAR President Elizabeth Mendenhall in response to the bill’s passing. “While we’re pleased that important homeownership incentives such as the capital gains exclusion survived in conference, additional changes are required to truly incentivize homeownership in the tax code.”
Timing also plays a role. Many of the provisions in the Tax Cuts and Jobs Act, including individual tax cuts, expire in 2025 and therefore may lead to tax hikes in the future, according to the Distributional Analysis of the Conference Agreement for the TCJA by the Tax Policy Center. The report states that taxes would be reduced by $1,600 on average in 2018, increasing after-tax incomes by 2.2 percent; however, in 2025, the average tax cut as a share of after-tax income would decrease by 1.7 percent for most income groups.
“The tax bill decreases homeownership incentives, but these benefits are not the only factors in the homeownership decision,” Kirchner says. “In the short run, homebuyers can look forward to more money in their pocket that can be used for a down payment or larger home.”
He adds that cuts in government services and economic development programs, along with the rescinding of tax cuts for individuals in a few years and the impact of tax reform-induced deficit on inflation, will weaken the impact of the after-tax income boost on homeownership.
“The change definitely removes some of the federal government’s preferential treatment towards homeownership,” Casey says. “Ultimately, with these new reforms, households will be more likely to maximize their tax breaks with a standard deduction. And when someone uses the standard deduction, it doesn’t matter if they spent an extra $5,000 on a house, a boat or a vacation—the spending is treated the same when tax season comes.
“It will be interesting to see how the temporary nature of some of these tax cuts shake out,” says Casey. “Will those households on the edge of homeownership make decisions based on what their new take-home income is in February, or will there be some apprehension if they think their taxes will rise down the road?”
According to an NAR statement, “As a result of the changes made throughout the legislative process, NAR is now projecting slower growth in home prices of 1-3 percent in 2018 as low inventories continue to spur price gains; however, some local markets, particularly in high-cost, higher-tax areas, will likely see price declines as a result of the legislation’s new restrictions on mortgage interest and state and local taxes.”
Dwindling inventory, high demand and even higher prices. Will the housing market shift next year?
According to a 2018 Housing Forecast by Trulia, the answer is contingent on many wait-and-sees. Definitive, however, is at least one indicator: the homeownership rate. In a continuation of its movement this year, the homeownership rate is expected to gradually track upward in the new year.
“Homeownership will continue its comeback story in 2018, as Gen Xers who were hard hit during the Great Recession become homeowners again, and as more millennials buy homes for the first time,” says Ralph McLaughlin, chief economist who developed the forecast, at Trulia.
A caveat: Across the board, buyers will contend with high costs, limited options and too-low wages—and millennials even more so.
“Homebuyers won’t be without challenges, as they’ll still face low inventory, slow wage growth and expensive starter homes,” McLaughlin says. “For millennials, they have the added hurdle of saving enough money to make a down payment and make competitive offers amid rising home prices.”
Buyers could fare better in some markets than in others. Considering economic indicators like employment growth, as well as entry-level supply, Trulia searches and vacancy rate, the forecast’s 10 housing markets to watch in 2018 are:
- Grand Rapids, Mich.
- Nashville, Tenn.
- Raleigh, N.C.
- El Paso, Texas
- San Antonio, Texas
- Fort Worth, Texas
- Austin, Texas
- Columbus, Ohio
- Madison, Wis.
- Cincinnati, Ohio
The forecast’s No. 1, Grand Rapids, is 11th in employment, 16th for its vacancy rate (the proportion of for-rent or for-sale supply that is vacant), and 17th in share of under-35 households—an indicator of a growing home-buying population.
Tax reform: If the mortgage interest deduction (MID) is now capped at $750,000, home equity deductions are gone and the property, sales and income tax deduction is combined and capped at $10,000, making the burden will be higher for homebuyers along the California coast and in the Northeast. A broader consequence could include an easing of existing-home sales, home prices and housing starts, the forecast predicts.
While the cultivation, distribution and possession of marijuana remain illegal under the federal Controlled Substances Act (CSA), nearly all states* allow for the limited medical use of marijuana and eight states (plus the District of Columbia) allow for some recreational use. More than 17 states allow individuals to grow their own marijuana plants for personal use.
To date, the federal government has primarily targeted marijuana trafficking and distribution of marijuana to minors; however, the Trump Administration has specifically stated that there is a “big difference”* between medical and recreational marijuana, and Attorney General Jeff Sessions is strongly opposed to the legalization of marijuana.
Marijuana legalization has an impact on real estate in a variety of ways. It can affect closings, leasing, property condition, association policies and more. If you are in one of the 46 states that allows some form of legal marijuana, you should develop policies and procedures for marijuana use and cultivation in properties that you own, sell, lease or manage.
Residents can request an accommodation for medical marijuana even if your building is non-smoking. You should consider what types of accommodation you will provide. Marijuana does not have to be smoked; there are edible options, and creams that can be absorbed through the skin.
If your state permits the use of recreational marijuana, there are also decisions to make. Do you allow residents to smoke it? If your property is non-smoking, do your rules apply to marijuana in addition to cigarettes? Does your condominium or homeowners association address this in rules relating to smoking and/or growing marijuana? If you do allow smoking (either for recreation or as a medical accommodation), how do you address secondhand smoke to other residents? What about future use of a unit if the odor permeates drywall or carpeting?
Recently, there have been changes in policy by some title companies, refusing to close or insure any property associated with the cultivation, distribution, manufacture or sale of marijuana. Obviously, this will complicate the settlement process for some properties. You should strive to be aware if title companies in your area have similar policies.
The biggest risk for real estate is federal civil asset forfeiture laws. If the government utilizes civil asset forfeiture, entire buildings and properties can be seized for being complicit in or failing to prevent illegal activity. This has not yet been used with respect to state-legalized marijuana; however, shifts in Trump Administration policies could change this policy by the federal government.
A summary of considerations by National Association of REALTORS® (NAR) affiliate the Institute of Real Estate Management is available here: http://irem.org/File%20Library/Public%20Policy/MarijuanaLegalizationLaws.pdf.
A brief video outlining marijuana issues is also available on NAR’s website here: www.nar.realtor/impact-of-legalized-marijuana.
Source: Megan Booth, Rismedia.com
Rents have been slowing in many areas, but exceptions are still giving renters sticker shock. Rents in the nation’s largest cities, in particular, continue to grow.
Nearly half of renters—or 46 percent—devote more than 30 percent of their income to rent, according to Census Bureau data. Economists consider that “cost-burdened.”
SmartAsset, a personal finance website, analyzed data median household incomes and average rents and compared them in 2013 to 2016.
Four of the top 16 cities with the largest rent increases are in California, according to the analysis. But it’s New Orleans that saw the steepest run-up in rental costs from 2013 to 2016. Rental costs increased 10.5 percent in that time, more than any other U.S. city analyzed.
Source: DAILY REAL ESTATE NEWS | WEDNESDAY, NOVEMBER 15, 2017