According to Zillow, rents in the United States have risen to the least affordable levels ever. An article published by CNBC stated that rent is over 30% of monthly income for the average renter nationwide. Conversely, most homeowners’ would pay less than 30% of their income toward their mortgage even if interest rates were to rise to 6%. That is comforting, given the prospects of rising interest rates in the near future.
Low vacancy rates keep pushing rents higher and higher. Meanwhile the home ownership rate is the lowest it has been since 1990. Then why are so many people opting to rent instead of buy? It seems probable that many of them would purchase a home if they could. Dr. Svenja Gudell, chief economist at Zillow, said “If you can possibly come up with a down payment, then it’s a good time to buy a home and start putting your money toward a mortgage.”