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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Riskmgmt who wrote (73929)	5/8/2011 2:31:26 PM
From: John Vosilla	Respond to of 217835

'Rents have been rising, while the income of renters has been falling. That's not a sustainable path... First, look at the black line for rents. They rose pretty consistently throughout the housing bubble, which isn't surprising. Rent is a substitute good to owning a home. While property prices increased, landlords were forced to charge more for rent. But even once the bubble popped, rents didn't take much of a step back. In fact, they rose significantly in 2009, according to this data. This could be due in part to some foreclosed or unsellable homes being converted into rentals, which sought a higher price than the average rental apartment. The other important line on this chart is the green one -- median renter income. It has fairly steadily declined throughout the entire decade, other than a small uptick in 2007. You don't need an advanced degree in economics to see a problem here: rents are increasing while incomes are declining. The result will be renters forced to spend a larger portion of their income on shelter than they have in the past, leaving less money for other necessities and discretionary spending. This data provides an opportunity for government housing policy. Even though home ownership may be desirable, it's far more important to ensure that some form of housing is affordable for all Americans. The government would be better off focusing its housing policy efforts at keeping renting affordable for lower-income Americans. The middle- and upper-income population can already afford to rent, and if they want to buy a home they can worry about doing that without government support. Message 27363518