5 Things to Look for in a Rental Listing

Lackluster listings abound — learn to cut through the clutter and spot the keepers.

Whether you’re looking for an apartment, single-family house or townhome — and whether you’re in a city, the suburbs or a small town — be prepared to spend a lot of time online and even more time driving around to tour the most promising places in person.

If you want to save time and avoid headaches, make sure that every rental listing you consider has all the information you need. High-quality listings help you weed out the places that don’t fit your criteria (wait, Fido’s not welcome?), but they also indicate an organized, communicative and professional landlord — something every renter wants.

As you begin your search, consider these five important things every good rental listing should contain:

1. Detailed details

Front and center should be the number of bedrooms and bathrooms, square footage, storage space and a floor plan to help you visualize the layout.

Avoid listings with vague terms like “junior one bedroom” or “open one bedroom.” According to Zillow research, 65 percent of renters require their preferred number of bedrooms. Landlords know this, so they get creative with descriptions to attract more tenants.

Another need-to-know detail is how safe the property is. Zillow research reports that 75 percent of renters said that a safe neighborhood is a must-have. Most landlords will say that the neighborhood is safe, so do your own research, especially if you’re new to the area.

Speaking of being new — if you’re moving to a new part of town or an entirely new city, look for listings with important facts about the neighborhood, including proximity to transit or major freeways, convenient shopping centers, and nearby recreation and entertainment options.

2. Amenities — all of them

Beyond basics like heating and kitchen appliances, every renter has different amenities that they consider must-haves.

The most popular amenities renters look for include air conditioning, in-unit laundry, ample storage and private outdoor space. Watch for other nice-to-have in-unit amenities, like recent renovations, hardwood floors, plenty of windows and upgraded kitchens.

Shared amenities should be included in the listing too — things like parking, rooftop decks, fitness areas, outdoor space, swimming pools and bike storage.

3. Major (and potentially problematic) policies

The listing should disclose any policies that could be a deal breaker for you. Examples include rules around pets (including specific breeds), the maximum number of people who can live in the unit, smoking, parking, noise and — most importantly — lease terms and length.

Additionally, see if you can tell if the landlord lives on-site or if a local property management company manages things. If the landlord is nearby, they’ll likely handle repair requests quickly, along with general building upkeep and maintenance.

4. Clearly described costs

Make sure the landlord is exceptionally clear about the dollars and cents:

  • What is the monthly rent?
  • How much of a deposit is required, and is any of it refundable?
  • Are there any one-time fees?
  • Is there a pet fee or monthly charge?
  • Does parking cost extra?
  • Who pays for utilities?

These additional charges can quickly move a listing from feasible to fruitless, so make sure you have all the info you need to do the math ahead of time.

5. High-quality photos

Focus on listings that have not only good photos but also recent photos — and lots of them.

Look for listings that include both interior and exterior shots, plus photos of all shared amenities. But renter beware: If the landlord says the photos are of a similar unit — not the one that’s actually for rent — you may find yourself in a bait-and-switch situation.

Once you find a few listings that include these details, you’re off to a great start. You can more easily compare properties side by side, identify deal breakers and find areas where a landlord might be open to compromising.

Related:

Originally published June 2018. Statistics updated January 2019.

Source: zillow.com

What Do You Need and Want in Your Next Home?

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While everybody knows that buyers shop based on price range, there are many additional considerations to make when looking for a home. And, most buyers end up refining their criteria once they start touring homes. Ultimately, your home criteria should depend on your personal lifestyle and needs. Regardless of what you’re looking for, here are some general rules you should follow to make sure you’ll be happy with the home you buy for the foreseeable future.

What are the top features buyers look for in a home?

Today’s buyers are juggling many different priorities when it comes to buying a home, but according to the Zillow Group Consumer Housing Trends Report 2019, here are the features that rank as very important or extremely important to most buyers.

Neighborhood wants and needs for buyers

  • Safety: 82% say a neighborhood that feels safe is very or extremely important
  • Walkability: 60% say it’s very or extremely important
  • Preferred neighborhood: 56% say it’s very or extremely important
  • Proximity to shopping, services and/or leisure activities: 53% say it’s very or extremely important
  • Optimal commute to work or school: 52% say it’s very or extremely important
  • Offers a sense of community or belonging: 48% say it’s very or extremely important
  • Close to family and friends: 46% say it’s very or extremely important
  • In preferred school district: 43% say it’s very or extremely important

Home features buyers want

  • Within initial budget: 83% say it’s very or extremely important
  • Air conditioning: 78% of buyers say it’s very or extremely important
  • Preferred number of bedrooms: 76% of buyers say it’s very or extremely important
  • Preferred number of bathrooms: 67% of buyers say it’s very or extremely important
  • Private outdoor space: 67% of buyers say it’s very or extremely important
  • Preferred size/square footage: 67% of buyers say it’s very or extremely important
  • Floor plan/layout that fits preferences: 67% of buyers say it’s very or extremely important

28% of buyers look for a home to rent out, 27% looked for smart homes, 58% of buyers looked for assigned parking

1. Search for the right price

Price will ultimately dictate what you can or cannot buy. While looking at homes above your price range can be fun, it’s not a good use of time — and it can lead to heartbreak when you realize it’s not financially feasible. Despite this, Zillow research found that in 2019, just 55% of buyers stayed on budget, while 26% went over their initial budget.

How to set your home buying budget

Use Zillow’s Affordability Calculator: This handy tool gives you an initial budget range based on your income, existing monthly bills, and down payment amount. Once you have that range, you can set up Zillow alerts for homes on the market that fit your price range, along with other criteria.

Get pre-approved: Once you’re ready to really start your home search, you’ll want to get pre-approved by the lender of your choice. They’ll approve you for a loan up to a specific amount, based on your income, debt and credit history.

Forecast your mortgage payment: Even if you are pre-approved for a large loan from your lender, you should make sure you’re comfortable with your estimated monthly housing payment. When you use Zillow’s mortgage calculator to estimate your monthly payments, be sure the taxes, insurance, and HOA fees are accurate — those items can make a big difference in your monthly costs.

2. Prioritize the location

Next to budget, location is one of the most important things to consider when buying a house. The 2019 report uncovered that 24% of buyers found it difficult or extremely difficult to find a home in their desired location. If you can’t find or afford a home in your ideal neighborhood, you’ll want to ask yourself a few questions (and enlist the help of your agent) to find a location that fits your lifestyle, needs and budget. Remember — your home’s location can’t be changed, so take the time to really identify a neighborhood where you’ll be happy live.

Proximity to downtown

Unsurprisingly, homes closer to core downtown areas have better resale value, thanks to their shorter commutes. According to Zillow research, in 29 of the country’s 33 largest metro areas included in the analysis, buyers should expect to pay more per square foot for a home within a 15-minute rush-hour drive to the downtown core. That may be why 15% of buyers who compromise to stay within their budget add time to their commute.

Community attributes

If you like being able to walk to restaurants and shops, try walking the distance to town to see if it’s doable. Spend some time exploring the area, checking out nearby parks and figuring out what kinds of attractions are nearby.

Alternatively, if you’re someone who likes a more solitary life and doesn’t mind driving, you might prioritize a home that offers more privacy, perhaps in a location that’s off the beaten path.

School district quality

If you have kids (or are planning on having kids in the future), you want them to get the best education possible. Checking out the school district ratings is a starting point, but you should visit the local schools to gather your assessment of the education and programs. Even if you don’t have children, the school district that your home is in can impact your future resale value.

Flood zone status

Homes located in flood zones require additional insurance, and buying a home in a flood-prone area means you need to be prepared if a flood actually happens.

3. Think long term

According to the Zillow Group Report, the typical homeowner stays in their home for 14 years before selling. When shopping for a home, don’t just think of your immediate needs. Make sure the home you select will meet your long-term goals, so you won’t have to move again in the near future.

Bedrooms and bathrooms

If you plan to expand your family in the near future, make sure the new home can accommodate your plans, whether it’s an extra room for a new baby, an in-law suite for parents, or a guest bedroom if you’re moving out of state and anticipate lots of visitors. The same goes if you are planning to downsize or you have grown children who will be moving out soon.

Outdoor space

As mentioned above, most buyers rank outdoor space as important. If you have a dog (or plan to get one), have kids who need a safe place to play or are an avid gardener, you’ll want to make sure the home’s outdoor space meets your needs.

Potential to personalize

Many buyers look for a home that’s move-in ready, so they can avoid costly repairs and updates (especially right after moving in). But at the same time, it’s nice to be able to add some personal flair to make a house feel like home. If you’d like to add some of your own style, be sure to steer clear of homes that you won’t be able to change enough to fit your preferences.

Lifestyle amenities

Ideally, your new home should enhance your current lifestyle — and you’ve probably already envisioned what your life in a new home will look like. As you evaluate houses, consider your hobbies and what makes you happy. For example, if you love spending time outdoors, you probably want a home with a nice yard. If you love to cook, maybe a nice, big kitchen is on your wish list. And, think about your current living situation: What things do you wish were different?

4. Assess property condition

TV makes home renovations look easy, but in reality, they’re anything but. If you’re a first-time buyer who has never undergone a renovation, you may want to steer clear of a home in serious disrepair. The costs can add up quickly, and if the home needs structural work, it could delay your move-in, causing unnecessary stress. Here are the three major categories of property condition.

Move-in ready

A move-in ready home is new, close to new, or has been recently renovated. Zillow-owned homes are move-in ready homes that have been recently renovated by a licensed contractor, and are ready for new owners to start their lives.

Minor updates

A home that needs minor updates might have cosmetic issues you’d like to change, or have some dated mechanical systems that could be updated for energy savings. Learn more about minor cosmetic details below.

Major renovation

A home that needs major repairs is usually priced lower due to the work that needs to be done. One upside to a major renovation is the opportunity to personalize the home to your tastes. Keep in mind that the return on investment for a major renovation isn’t 100%, and you risk a delayed move-in if the repairs are more extensive than anticipated.

Check condition of costly systems

No matter the condition of the home you’re buying, make sure your inspector checks to make sure major systems and mechanicals in the home are functioning properly. If issues are uncovered, you’ll want to ask the seller to either repair them before closing or offer a credit so you can fix them yourself. Look out for the following costly issues:

  • Damaged roof
  • Older furnace or HVAC system
  • Flooding, water damage or mold
  • Old insulation
  • Plumbing issues
  • Exterior cracks
  • Uneven floors

5. Don’t focus on minor cosmetic details

No house is perfect, so try not to get hung up on little imperfections. For example, don’t eliminate a home from your list just because you don’t like the interior paint color. Cosmetic changes are fairly easy and affordable to make. Don’t let the following minor issues keep you from buying a house you would otherwise love:

  • Paint
  • Hardware
  • Furnishings
  • Landscaping

When you attend showings and open houses, or even when you’re just browsing through pictures online, it’s easy to get distracted by clutter. Try not to pay too much attention to the seller’s stuff — it’ll all be removed by the time you move in. Put in the effort to picture the house as a blank canvas for all of your belongings.

6. Stick with your must-haves

There’s a big difference between wants and needs, so create two different lists when searching for a home. For instance, a shorter commute may be a must-have, but smart home features are a nice-to-have. Practicality and functionality should always take priority over the bells and whistles.

Things to consider when buying a house: needs vs. wants

For example, your list of needs might look like this.

  • Need: shorter commute
  • Need: specific number of bedrooms and bathrooms
  • Need: parking

Other items might fall to your list of wants, like these.

  • Want: updated kitchen
  • Want: upstairs washer and dryer
  • Want: smart home features

Source: zillow.com

Which 10 U.S. Metros Have the Most Empty Nesters?

Kids in the Great Lakes region are, apparently, more likely to fly the coop.

Pittsburgh is strong as steel when it comes to empty nest households, according to new Zillow research.

Steel City holds the top spot in a new survey of markets where older homeowners live in a house with no children. The number of empty nests nationwide is higher than ever before, having climbed steadily in the past decade, says Aaron Terrazas, a senior economist at Zillow.

An “empty nest” is defined as a home where the heads of the household are 55 years or older, own the home, and have lived in it 10 or more years. There are no children — of any age — living in the home.

In Pittsburgh, 20.2 percent of homes are considered empty nests, based on U.S. Census Bureau data. Buffalo, Cleveland, Richmond, and Birmingham round out the top five metros with the highest percentage of empty nesters.

But empty nests aren’t necessarily a bad thing, says Dr. Christine Proulx, an associate professor at the University of Missouri who studies families, relationships, and marriage.

“For the most part, the change was sort of marked with pride and a sense of awe and wonder,” says Proulx, who has analyzed empty nesters as part of her research. “[You’re] watching this human being that you have been in charge of since birth — or close to birth — mature into a young adult.

“It’s just a very pleasurable shift in that relationship,” she adds.

The places with the lowest densities of empty nests include booming cities with strong job markets, such as Austin, Phoenix, and San Francisco. Retirement communities, such as Fort Myers, Tampa, and Orlando — all in Florida — also registered low on the list.

An additional 4.3 million households are “near-empty” nests, meaning they would be empty nests if an adult child currently living at home were to break out on their own.

That harkens back to the idea that empty nesting may not be a permanent thing, Proulx adds.

“I call them boomerang families,” she says. “I don’t think empty nesting is now a one-time shot.

“I’m more Gen X,” continues Proulx, now a parent herself. “I think people in that generation are also leaving and then coming back.” 

Read the full report.

Related:

Source: zillow.com

How Much Does It Cost to Move?

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Making the decision to move can be exciting, whether you’re moving across town or across the country. And there’s one question pretty much everyone thinking about moving asks: How much will it cost to relocate?  

There are all kinds of moving expenses to keep in mind, including cost of living, balancing two mortgages (or a mortgage and rent) during the transition, and the cost of actually getting all your belongings from point A to point B. Here’s some information about average moving expenses to help you make sense of it all.

Estimating moving costs

Roughly half of all people who move use professional movers, whether they’re moving short or long distances.

These are average costs for moving, according to HomeAdvisor. Of course, prices vary by region and by distance.

Type of move Average charge Extra charges
Local/intrastate (under 100 miles, including 2 movers + truck) $80-$100 per hour + $25-$50 extra per additional mover
Interstate/cross-country (over 100 miles) $2,000-$5,000 per move + $0.50 per pound

How much does it cost to move across town?

Local moves make up the vast majority of people moving every year. According to Zillow research, 57% of home buyers who also sell a home move within the same city, and 86% move within the same state.

For local moves, you’ll typically pay an hourly rate that includes a truck and the services of two movers. The bigger your home, the longer your move will take. According to Zillow research, sellers pay an average of $475 to professional movers for local moves. 

Consider these estimates from HomeAdvisor. 

Size of house Estimated time of move Average price range
1-bedroom apartment 3-5 hours $200-$500
2-bedroom apartment 5-7 hours $400-$700
3-bedroom house 7-10 hours $560-$1,000
4-bedroom house 10+ hours $800-$2,000+

How far in advance should I book local movers?

Note that most people move between May and September, so you’ll want to book your movers at least four weeks ahead of time. The earlier you book, the more likely you are to get the day and time that works best for you, and the more likely you are to get an experienced crew.

The least expensive days to move are Monday-Thursday. In the offseason (October-April), you can often book movers with only one to two weeks’ notice.

How much does it cost to move across the country?

Local movers typically charge by the hour, but for a cross-country move, you’ll likely be charged based on two key variables: weight and distance.

Weight

Before the move, the empty truck is weighed, and your mover should provide an “empty weight” receipt. Then, once all your belongings are loaded, they’ll weigh your truck again to determine your moving cost.

Have no idea how much your belongings weigh? Reputable movers will give you an estimate before you sign on the dotted line, using average weights for homes of your size (more on estimates later).

For example, the goods inside a 1,000-square-foot, 3-bedroom apartment typically weigh about 5,000 pounds. A 2,800-square-foot, 4-bedroom home’s furnishings typically weigh in at around 20,500 pounds.

Distance

Simply put, the farther a moving company has to transport your belongings, the higher the bill will be. You’ll likely be charged a per-mile rate in addition to the weight-based charges. Make sure to ask if there are any additional transportation charges, like fuel or tolls.

How far in advance should I book movers for a long-distance move?

For an interstate or cross-country move, you’ll want to book your movers as early as possible — ideally six to eight weeks before your move.

Movers loading moving truck

Moving costs vary depending on factors such as the number of belongings, the length of the move and the services provided.

Typical moving expenses

Whatever kind of move you’re planning, the moving expenses you’ll incur will vary based on the level of service you’re looking for:

  • Just a truck rental: In this scenario you’ll be doing the packing, loading, transportation, unloading and unpacking on your own with a rental truck. Flat per-day rates start at around $20 per day, depending on the size of the truck, plus charges for gas and mileage.
  • Loading, transportation and unloading: Save your back by doing all the packing and unpacking yourself, but have professional movers do the heavy lifting. For a local move, this service can range from $200 for a 1-bedroom apartment to $2,000+ for a 4-bedroom house.
  • Full-service moves: Leave everything to the pros, including wrapping and packing your belongings, loading them, transporting them to your new home and unloading. You’ll just be responsible for unpacking your belongings and getting settled. This type of move is usually used for long-distance moves. Expect to pay roughly $2,000 to $5,000 for the transportation, plus about $0.50 per pound, plus $25 to $50 per hour per mover for packing and unpacking help.
  • Temporary storage: If your moving dates don’t line up, you may have to temporarily stash your things in a storage unit or moving container. Storage facility rates start at about $50 per month for a small unit and go up to $300 or $400 for larger units. If you’d like the convenience of a portable storage unit that’s delivered to your home, loaded by you, and stored in a warehouse until you’re ready for re-delivery, expect to pay $150 to $300 per month, plus delivery and re-delivery costs.
  • Moving supplies: Instead of buying and then recycling boxes, you can go green and rent hard plastic boxes for your move. Prices start at about $50 per week for enough boxes to pack a 1-bedroom apartment and up to $200 to pack a large house. Once you’re done, the rental service will pick up the boxes. To save money on cardboard boxes, check your local “buy nothing” group or moving truck rental company, which often has used boxes on hand.  

Additional costs of moving

When calculating your relocation budget, keep these unexpected moving costs in mind:

  • A transportation surcharge if the moving company pays workers more for working in metropolitan areas where labor costs are often higher
  • Full value protection insurance (released value protection is typically included by movers at no cost, but the protection is minimal — just $0.60 per pound per article lost or damaged)
  • Charges for moving vehicles, including cars, boats and motorcycles
  • Surcharges for moving large or fragile items
  • Additional charges if the movers have to walk more than 75 feet from door to truck, or if they need to use stairs or an elevator
  • Additional charges if your street is too narrow to accommodate a moving truck and they’ll need to shuttle your belongings with a smaller truck
  • Unexpected moving costs if there’s a delay in the availability of your new home and the moving company has to put your items into storage

Moving cost agreements

Any reputable moving company should provide a quote using the industry-standard rate book published by the Household Goods Carrier Bureau, called the Tariff 400-N. There are two main types of moving quotes:

  • Non-binding estimates are the industry standard. They reflect the company’s best guess as to what your final bill will be, but they can often be inaccurate. Whenever possible, opt for a not-to-exceed quote.
  • Not-to-exceed estimates are quotes where the moving company commits to a maximum price.
Family unpacking belongings after moving

To avoid being surprised by high moving costs, ask your movers to provide a not-to-exceed estimate.

Get moving

When it comes to moving, the best way to limit your costs (and to keep your sanity) is to move quickly. The faster you’re out of your old home and into your new home, the less you’ll pay in movers, rented supplies, storage costs and — most importantly — overlapping mortgage payments or rent.

Looking to sell your house in a hurry? Check out Zillow Offersjust answer a few questions about your home, get a free home evaluation and receive a cash offer from Zillow in as little as one week, without ever listing.

Source: zillow.com

Homes With Blue Bathrooms Sell for $5,440 More Than Expected

For-sale listings with cool, neutral wall colors sell for more money, according to Zillow analysis.

A fresh coat of paint in the right color may help sell a home for more money.

Homes with rooms painted in shades of light blue or pale blue/gray can sell for as much as $5,440 more than expected, according to a new Zillow report.

Zillow’s 2017 Paint Color Analysis looked at more than 32,000 photos from sold homes around the country to see how certain paint colors impacted their sale price on average, when compared to similar homes with white walls.

Curious what colors may help you sell your home for more? See below for the full results of the 2017 Paint Color Analysis.

Blue kitchens

Homes with blue kitchens, often found in soft gray-blue, sold for a $1,809 premium.

Light blue bathrooms

Homes with light pale blue to soft periwinkle blue bathrooms sold for $5,440 more than expected.

Brown living rooms

Turns out homes with light beige, pale taupe or oatmeal-colored living room walls sell for $1,926 more than expected.

Cadet blue bedrooms

Homes with light cerulean to cadet blue bedroom wall colors can come with a $1,856 premium.

Slate blue dining rooms

Homes with slate blue to pale gray blue dining rooms also sold for more money — $1,926 more on average than homes with white dining room wall colors.

“Greige” home exteriors

A home’s exterior color may also have an impact on its sale price. Homes painted in “greige,” a mix of light gray and beige, sold for $3,496 more than similar homes painted in a medium brown or with tan stucco.

Navy blue front doors

For a pop of color, homes with front doors painted in shades of dark navy blue to slate gray sold for $1,514 more.

Selecting the right paint color is one of many factors that may affect why a home sells faster or for more money. Walls painted in cool neutrals like blue or gray have broad appeal, and may be signals that the home is well cared for or has other desirable features.

Some colors may actually deter buyers. Homes with darker, more style-specific walls like terracotta dining rooms sold for $2,031 less than expected. However, a lack of color may have the biggest negative impact as homes with white bathrooms sold for an average of $4,035 below similar homes. Zillow’s full report can be found here.

Sellers can also consult Zillow’s Owner Dashboard to see in real time how their listing is performing compared to similar ones on the market.

Related:

Source: zillow.com

4 Surprising Things That May Increase How Much Your Home Is Worth

Does your home offer any of the perks some buyers will pay more for?

To understand how much your home is worth, you have to know what affects its value. The Zestimate home value is Zillow’s tool for extrapolating the real market value of your home, based on existing home-related data and actual sales prices in your area.

Thousands of data points correlate with home values and sale prices — some of which are obvious (like the condition of the home) and some that aren’t.

Here are several surprising things that can affect either the existing value of your home or the price someone is willing to pay for it, all based on data.

1. Proximity to a Starbucks

How far do you have to drive to get a Frappuccino? If the answer is “not that far,” you’re in luck.

A 2015 Zillow report found that, between 1997 and 2014, homes within a quarter-mile of a Starbucks increased in value by 96 percent, on average, compared to 65 percent for all U.S. homes, based on a comparison of Zillow Home Value Index data with a database of Starbucks locations.

To evaluate if this effect is isolated to Starbucks, the research team looked at another coffee hot spot (one with particular pull on the East Coast): Dunkin’ Donuts.

The data showed that homes near Dunkin’ Donuts locations appreciated 80 percent, on average, during the same 17-year period — not quite as high as homes near a Starbucks, but still significantly above the 65 percent increase in value for all U.S. homes.

2. Blue kitchens and blue bathrooms

Beyond America’s obsession with curb appeal, what’s inside your house counts a lot too — especially the colors you paint the rooms (particularly the kitchen).

According to Zillow’s 2017 Paint Color Analysis, which examined more than 32,000 photos from sold homes around the country, homes with blue kitchens sold for a $1,809 premium, compared to similar homes with white kitchens.

Blue is also a popular bathroom shade. The same analysis found that homes with pale blue to soft periwinkle-blue bathrooms sold for $5,440 more.

Walls painted in cool neutrals, like blue or gray, can signal that the home is well cared for or has other desirable features.

3. Trendy features

Joanna Gaines’ aesthetic is permeating more than just your YouTube search history. Zillow listings mentioning the shiplap queen’s favorite features — like barn doors and farmhouse sinks — sell faster and for a premium, according to a 2016 Zillow analysis of descriptions of more than 2 million homes sold nationwide.

Listings with “barn door” in the description sold for 13.4 percent more than expected — and 57 days faster than comparable homes without the keyword. Meanwhile, listings touting “farmhouse sink” led to a nearly 8 percent sales premium.

Sellers can use the listing descriptions to highlight trendy details and features that might not be noticeable in the photos.

4. How close you are to a city

If you own a home in a major American metropolitan area, you’re most likely sitting on a significant (and rapidly appreciating) financial asset. Case in point: Home values in the New York, NY, metro area are worth $2.6 trillion, per a recent Zillow analysis.

The average urban home is now worth 35 percent more than the average suburban home. Since 2012, the median home value in urban areas has increased by 54 percent, while the median home value in suburban areas is up just 38 percent.

Related:

Source: zillow.com

Rental Affordability Is Worst in Minority Communities

Renters living in predominantly Hispanic or black neighborhoods have to spend more of their income on rent than those in white communities.

Housing has become less affordable for all renters since 2011 as rent appreciation greatly outpaced income growth. But for renters living in predominately black or Hispanic neighborhoods, the situation is decidedly worse.

New data shows that, on average, residents of predominantly white neighborhoods spend 30.7 percent of their income on rent, in line with the generally accepted standard of 30 percent. Renters living in predominately black neighborhoods spend 43.7 percent of their income on rent, and renters in largely Hispanic communities spend 48.1 percent.

For renters in minority communities, devoting such a large share of income to rent limits their ability to save for a down payment, which would allow them to transition their costly rent to more affordable mortgage payments.

And when rents are unaffordable, renters begin making sacrifices like forgoing necessary medical or dental care and contributions to retirement accounts.

Tougher all around

In markets where rents overall are high for all residents, minority neighborhoods are hit even harder than white communities. In Los Angeles, renters in white communities spend 50 percent of their income on rent — well above the recommended 30 percent, but still far less than renters in black or Hispanic neighborhoods, who pay a premium of 63.7 percent and 63 percent, respectively.

In expensive San Francisco, rent in largely black communities requires the greatest share of the median income (74.8 percent), followed by rents in primarily Hispanic communities (62.5 percent) and then, after a sizable gap, rents in predominantly white communities (48.8 percent).

Boston follows a similar trend, with residents in black communities paying 71.2 percent of the median income, followed by 59.5 percent in Hispanic communities and 34.8 percent in white communities.

“This research sheds light on another example of inequality in the housing market,” said Zillow Chief Economist Dr. Svenja Gudell. “Renters in African-American or Hispanic neighborhoods find themselves in a catch-22 situation: While owning a home is a great way to build wealth, you need to save up some cash to be able to buy. If you’re spending close to half of your income on rent, saving for that down payment is going to be incredibly difficult.”

These differences shift for homeowners, with mortgage payments requiring the greatest share of income from owners in Hispanic neighborhoods, at 22.8 percent. Homeowners in white communities allocate more of their incomes to their mortgage payments (15.2 percent) than owners in primarily black communities (13.6 percent).

Still, transitioning from renting to owning remains a challenge for minorities, not only because they have less income left over to save for a down payment, but also because race impacts minorities’ ability to get approved for a mortgage. Home values in predominantly black communities also tend to be much lower than home values in predominantly white communities, contributing to this difference.

Related:

Source: zillow.com