For rent and utilities to be considered affordable, the goal is to spend no more than 30 percent of a household’s income on housing. According to a comprehensive Harvard study, however, approximately half of all U.S. renters are spending more than 30 percent of their incomes– up from 38 percent of renters in 2000. Housing Secretary Shaun Donovan declared this to be “the worst rental affordability crisis that this country has ever known” in December.
Between 2007 and 2013 the United States added, on net, about 6.2 million tenants, compared with only 208,000 homeowners. That trend is continuing as young people and roommates move out on their own. New households rarely plunge straight into homeownership, especially given that mortgages are much harder to obtain than they were before the financial crisis. “The expectation is that when they strike out into their own units they’ll be moving into rental as opposed to the owner side,” said Stan Humphries, the chief economist of Zillow.
Apartment builders have raced to build more units, but demand shows no signs of slackening. As long as there are plenty of upper-income renters looking for housing, there is little incentive to build anything other than expensive units, creating in effect two separate rental markets that are so far apart in price that they have little impact on each other.
In Raleigh, at least for now, it is cheaper to rent than to buy a home. According to Rent.com and FlatRateMoving, the rental vacancy rate of Raleigh is 8.8 percent. The median rental rate for a 1-bedroom apartment is $949 and $1,039 for a 2-bedroom apartment, making the average apartment rent 94 percent the cost of the average monthly mortgage payment in Raleigh. If you live in other parts of the state, such as the Charlotte and Greensboro-Winston-Salem areas, it is cheaper to buy.