There was once a time when buying a house was considered a guaranteed winner of an investment.
But the inflating and subsequent burst of the housing bubble has left many sceptical of the long-term value of owning a home.
Furthermore, many households are less willing to take on such a large fixed liability.
As a result, rentals have been hot.
And while home prices and sales have rebounded recently, it continues to be much cheaper — on average — to make mortgage payments than rental payments in the U.S.
“Nationally, the share of income that households must devote to rent has increased steadily and consistently since 2000, as the increase in rent has dramatically outpaced the growth in income over the same period,” said Zillow’s Krishna Rao. “Over the period from 2000 to 2014, median household income has increased by 25.4 per cent, while rents have increased over 52.8 per cent, more than twice as much. On the heels of our recent analysis showing the erosion of affordability of homes for purchase, this represents even more bad news for those looking for housing.”
Check out this chart from Zillow for some historical context.