The average home value, meanwhile, grew by 3 percent to $178,400. Rents outpaced home values in 20 of the country’s 35 biggest markets.
Don’t expect the trend to reverse soon. Zillow predicts that home values won’t grow as fast in the back half of the year. Growth will be closer to 2 percent.
The average renter spends about 30 percent of his or her income on rent, while homeowners spend about 15.3 percent of their pay on their mortgages.
“There are tremendous incentives to get into homeownership these days: mortgage access is improving, interest rates are low, and home values remain below prior peaks,” said Dr. Stan Humphries, Zillow’s chief economist.
“But it will be increasingly difficult for many renters to realize these benefits as this country’s growing rental affordability crisis continues to worsen. More income going to rent means less going to savings for a down payment and other costs, keeping renters renting longer and feeding into the high demand that is contributing to rising rents in the first place.”
Article compliments of Community Investor Magazine.