A combination of foreclosures and new college graduates crowding into the strongest job markets has raised demand for rentals. Renters accounted for all the 8 million-plus net households the United States added in the past decade. Home ownership has dipped to 63.5 percent, near a 48-year low.
That demand has driven up rents, which in turn have prevented or delayed people from buying first homes.
The government says if you spend more than 30 percent of your pretax pay on housing, you are “cost-burdened.” The total number of renters in that category has jumped more than 30 percent in the past decade, to 21.2 million. Half of all renters are now considered cost-burdened, compared with just 24 percent in 1960.
These trends are reflected in how and where Americans live. Suburban cul-de-sacs built for owners are now tilting toward rentals, especially in such areas as Orlando, Las Vegas and Tampa, where the bubble and crash were especially intense.
After the bust, investors bought distressed houses in these communities at sharp discounts and rented them out. Many of the new tenants belong to Generation X households — ages 35 to 51 — that began renting after the crash, according to the Harvard University Joint Center for Housing Studies.
Rents have also jumped in areas that absorbed many young college-educated job hunters. These workers have increasingly clustered in areas, including Boston, San Diego and Washington, with abundant jobs but high housing costs. The result is delayed home ownership for a population group that historically had the means to buy.
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