With housing shortages in our local area and across California, rising rental prices and home values are creating a challenging environment for both the young and old. A 2 bedroom, 2 bath house in Pacific Grove can easily rent for $3000. A 3 bedroom home in Pebble Beach can rent for $3500-$5000 depending on location. Although home ownership requires money for repairs and maintenance, the balance between renting and owning may be tipping. Here is some information from Harvard University Joint Center for Housing Studies:
Nearly a third of all households—or 38.1 million—paid more than 30 percent of their incomes for housing in 2016
Renters, in particular, are facing high costs. Nearly 21 million renters—or 47 percent—paid more than 30 percent on their housing; 11 million paid more than half their income on housing.
The median home price rose 41 percent faster than inflation between 1990 and 2016; the median rent increased 20 percent faster. The nation also had 2.5 million fewer units renting for less than $800 a month.
Home prices increased 6.2 percent in 2017 and are now above pre-housing crisis peaks in a majority of housing markets.
Rents have risen by 3.7 percent, but there are some signs that rents are cooling as vacancies tick up, according to the report.
“The easing conditions in the rental market reflects the fact that, after a decade of soaring rental demand, U.S. households are returning to homebuying,” according to the report. The national homeownership rate increased for the first time in 13 years in 2017—reaching 63.9 percent, up 0.5 percentage point from its low in 2016.
Source:“The State of the Nation’s Housing 2018,” Harvard University Joint Center for Housing Studies (June 2018)