Owners Faring Better Than Renters

May 14, 2019
Owners-Faring-Better-Than-Renters
The monthly cost to rent a single-family home has increased significantly, while the typical home loan payment and costs associated is lower.

 

Homebuyers may have fared better following the latest housing boom than renters, according to a report from CoreLogic. Data from CoreLogic’s Single Family Rental Index indicates that renters are more cost-burdened than homeowners, and that the monthly cost to rent a single-family home has increased significantly, while the typical home loan payment and costs associated is lower. Additionally, the national rental index from CoreLogic is up 36% in December 2018 compared with December 2005, but the typical home loan payment was down 4% over that period. 

Seven of the 12 large metro areas evaluated by CoreLogic indicated rent increases between 27% and 61% between December 2005 and December 2018, while also reporting drops in the typical home loan payment ranging from about 3% to 24%. "Income growth, home appreciation and sound underwriting combined have pushed delinquency rates to their lowest level in 20 years,” said Frank Nothaft, CoreLogic Chief Economist. “The low delinquency rates on home loans are a contrast to the rising delinquency rates on consumer credit." According to CoreLogic, homeowners are just less cost burdened. As of 2017, 27% of homeowners were “cost burdened,” meaning 30% or more of their income went toward the monthly loan payment and other owner expenses, down about 10 percentage points from 2007. Meanwhile, 46 percent of renters are cost burdened as of 2007, up from 45.6% in 2007. 

Source: DS News