Zillow’s second quarter analysis of U.S. rental and mortgage affordability shows that renters in the U.S. spent 30.2% of their monthly income on rent, the highest percentage ever. Before the real estate bubble and bust, U.S. renters could expect to spend about 24.4% of their incomes on rent. They go on to say that unaffordable rents are making it hard for people to save for a down payment and retirement. Zillow’s chief economist, Dr. Svenja Gudell, says, “There are good reasons to rent temporarily – when you move to a new city, for example – but from an affordability perspective, rents are crazy right now.” In fact, mortgages are much more affordable, with payments averaging 15.1% of monthly household incomes, less than the historical average of 21%.
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