With housing supply as constrained as it is currently, it may come as a surprise to some that mortgages are more affordable now than they were 20-40 years ago, but a new study from Zillow shows just that.
The new report concludes that U.S. homeowners pay $3,300 less in mortgage costs annually, thanks in large part to low interest rates, than they did in 1985-2000, spending 15.4 percent of their monthly income on a mortgage now vs. 21 percent during the aforementioned 15-year span.
Conversely, renters now spend $2,000 more annually on rent than during that same span, with the median rent nationwide taking up 29 percent of median monthly income compared to 25.8 percent of income before the turn of the century.
Rent and mortgage affordability in DC
This affordability differential is vastly more pronounced in the District, where renters spend $8,313 more annually on housing than they did historically. Renters in the DC area pay 26.1 percent of their monthly income towards rent, 8.5 percent more than they would have spent in 1985-2000.
The relatively high median income in the region likely has a lot to do with why renters here pay so much more annually than they would have previously, yet pay a smaller share of monthly income on rent than the typical U.S. renter. Zillow’s conclusions are based on housing data from the third quarter of 2017.
Thumbnail images by Ted Eytan.
This article originally published at https://dc.urbanturf.com/articles/blog/dc-area_renters_pay_8313_more_annually_on_rent_now_than_20_years_ago/13312.
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