WASHINGTON, DC–Studies of this nation's housing stock have shown, in various ways and from various angles, that we have an affordability problem. Earlier this year Freddie Mac found that a combination of increasing rents and stagnant household incomes has caused the already-acute shortfall of affordable rental units to widen considerably over the past six years. More recently, a report by the Joint Center for Housing Studies of Harvard University http://www.globest.com/sites/erikamorphy/2017/12/20/rental-homes-demand-is-starting-to-ease/ said that the apartment market is settling into a “new normal” in which nearly 21 million households pay more than 30% of their income for rent.
Now comes a report from RENTCafé, which looks at the same issue through a different filter: the strain that holiday expenditures put on a renter's budget. It has found that the average American renting family cannot afford the holidays without $549 in savings.
It writes:
Buying gifts, decorations and festive dinners toward the end of the year is a painful addition to everyone's budget, but these extra holiday expenses put a strain on renters in particular as they typically have much lower incomes – about half that of homeowners.
RENTCafé analyzed data from US Census, Bureau of Labor Statistics, National Retail Federation and Yardi Matrix to see which are the cities where the winter expenses really put a strain on renters. It took into consideration the local household incomes, the average cost of living, holiday spending, and local rents. It discovered that in 26 out of the 50 largest US cities, tenants will either need savings or will have to go shopping this year with next year's money, that is, credit. It found that:
- On average, an American family of four spends about 2.8% of their annual income on winter expenses.
- Renters in Virginia Beach and Wichita are among those still left with money in the bank after paying the rent, buying gifts and covering other consumer expenditures.
- Among the cities that require the most substantial savings for the winter holidays are Manhattan and Boston.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
