If you rent instead of own, like us, a new study released Tuesday by the Harvard Joint Center for Housing Studies says you’re barely making ends meet. According to their findings 25% of renters in the United States are spending more than half their annual income on their rent and utility bills. Wow! The experts recommend spending no more than 30 percent of your income on living costs, but thanks to an extended visit from Mr. Recession, that’s not looking much like a viable option for renters these days. Put simply, we renters are all over-extended, low on cash, and stuck there, experts say.
Now this really turns my frown upside down – especially since lately I’ve been advocating renting over owning for a few more years, mainly because we just can’t afford a mortgage right now and the risks that come with aren’t ideal for us. Here I am thinking that since New Jersey is known for having some of the highest property taxes in the country, we’re also getting screwed on rent too. But, maybe our grass is a little greener at the moment. For starters not a single state in New Jersey makes the Most Cost-Burdened Renters List (phew!), and although we pay the equivalent of a small mortgage ($1560) each month to live in our spacious but not nearly modern, two-bedroom apartment, that plus our utilities equals less than half of our monthly income. It does help that we’re splitting costs in our home whereas others are paying the same bills with one income.
It does sound like we’re doing alright compared to other renters in other states, BUT the fact still remains that once you factor in all the other bills and the unreal costs for groceries and gas these days, we’re struggling too. So where does that leave us? Screwed if we rent and even more screwed if we don’t? Sigh…Mr. Recession, please go back to where you came from, now! We’re newlyweds and we’d still like to hold on our little dream of saving up for our little house, with our little yard, and our little kids running around all through it. Who are you to take it from us? Huh? That is all.
Are you feeling the squeeze in rental and living costs in your neck of the woods? Roll call: What’s the “cost of living” like in your ‘hood?
photo: Tiger Pixel
Related articles
- Study: Rental Affordability Worsens After Recession (blogs.wsj.com)
- Affordable rental homes hard to find (money.cnn.com)
- Soaring Costs Force Some Renters To Chose Between Shelter And Food (huffingtonpost.com)
My mouth is wide open that you called $1500 the equivalent of a small mortgage! Our mortgage is about half of that, in a 1300sqft home in a very desirable subdivision. But,i live in Arkansas, so I guess thats where the difference comes in.
Before we bought, we were paying $475 monthly for a 1 bedroom, 600sqft apartment, gated. For us, when we were already in need of m more space, continuing to rent didn’t make sense when for a couple hundred more, we could have our own space. Even with that said, we were going to rent for another year anyway, to really bulk up our savings, but then the hubby ran across an amazing deal on a great home, that we couldn’t let pass us by.
I complain about the lack of stuff to do in Arkansas, but I guess that’s part if what keeps our cost of living pretty low!
Wow! I own an 1100 sq. ft. two bedroom townhouse in South Carolina. My mortgage payment went up this year (property taxes) from $531 to $542! I was HOT! But, I will not complain at all. I definitely think everyone is pinching every penny, renters and owners. I'll be the first to admit that almost all my money goes to bills. And with one income, the light at the end of my very long tunnel seems so far away. But, I am blessed.
Excuse me while I call my mama and tell her that I'm moving back home.
Really!?!? I would go nuts for that! Your mortgage is our gas/electric and cable bill combined…sigh!
I actually need to cancel my cable but I can't bring myself to do it. I need my DVR and don't forget the movie channels. One day I'm going to do it. One day. My car will be paid off next year so I'm pretty excited about that. That will be more money to pay toward my student loans (gag!). Who know growing up required all this?!
As we all know the cost of living is much cheaper in the South, I def feel the same pain/burden as you Charli….I pay 1210/mo and that is great around my area in MD. Still hurts my pockets and seems to make saving impossible when I add in child care, ins, food, groc, car note etc. …add the list goes on.
Wow we were paying 800 dollars for a two bedroom apt a couple of yrs ago we decided to buy a house because we felt we were able to afford it. Low and behold I lost my job hubbys hours got cut about a yr after we moved and the struggle has been on ever since. We pay 1100 doolars for our mtg and with everything else added it's a hit. We were thinking of one time giving up our home and moving back to an apt just to save money but we are trying to stick it out for the kids for now. Sometimes renting is the best thing to do I wish we had waited a little while longer. BTW we live in GA
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Move to California (some parts of California) and you might think your rent isn't so bad. Apartments go from $1300 and up (including studios). If you find something cheaper, you lucked out. Houses: $500,00 and up (and its not a new home either)..new homes, from $700,00 and up and you don't get much square footage either.
If you in the south, count your lucky starts you don't have my problems, but the pay scale might not be the same either. Oh and don't even get me started on our gas prices: $4.29 a gallon and in some parts $6.00 a gallon.
Do you want to live in California? This economy is NO JOKE!
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Here in Vegas it's not too bad. We're struggling but we always get the rent paid and we are one income.
We had the option of keeping our 1 bedroom and staying at $780/month + utilities (monthly avg for all = $815) or upgrade to a 2 bedroom at $759/month + utilities (monthly avg for all = $800). Only about a $15 savings each month but it's worth it to us considering we needed the space.
We are struggling to make our car payment, insurances, 1 credit card, and a few others but we're tackling them one by one and getting ourselves out of hot water. Does it help that gas and food prices go up while his wages remain stagnant? Hell no. But we're determined to make do and fight it out.
We're lucky the rent isn't ridiculous and we can actually afford where we live but coupled with the rest of costs of living it can sting.
My cousin just bought a condo there for $80,000 when it was priced 2 yrs ago at $200,000. They really lost their butts in Las Vegas. My aunt bought her house from her move in Calif before the Las Vegas boom hit. She said every house around her is FOR SALE or vacant.
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Ha! We lived in California actually (West Oakland/Lake Merritt) and I have to tell you although they're both priced about the same as far as owning/renting (East and west coast that is) I will say you guys get better units/homes for the money out there — even if the square footage is smaller. We pay the same price for a lot of crappy old buildings/homes over here. Sad, but true!
Hey, if you want to move out here and be neighbors with us, works for me!! I'd love to have you in my neck of the woods. You're the type of person and wife I'd love to have in my circle of friends out here.
we are lucky, UT is pretty affordable especially since we live in a college town. Our rent includes all utilities- plus internet/basic cable. That makes it easy to budget.
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Our apartment complex was not living up to all the amenities we were paying for, and the hubby is cool with taking care of stuff himself, so we thought about owning when time came for our next move, but opted for renting a house. It just didn't make sense for us to own when I'm going to graduate in 3 years and who knows where my residency will be…
As far as cost of living in our hood (Indianapolis): On our three bedroom apt (1275sq ft) with a one car garage we were paying $1034/month on rent + water, and then AT LEAST another $200 (it got up to 300 once in the middle of the winter) on electricity…
Our new place is a three bedroom house, 2 car garage, fenced in yard, and we went up to 1800sq ft for $875/month, and gas,electric, and water come to maybe $150/month…
They are pretty generous with cost of living when doling out student loans, and we have hubby's income so we are able to share expenses and we aren't really ever living paycheck to paycheck (unless it's the end of the semester or vacation and I didn't budget well…i.e. shopped a lot LOL)…
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Wow! I live in Ohio and your rent is a little bit more than our mortgage. Even though housing costs are relative to your section of the world, the comments on this post indicate that times are tough everywhere.
Gas has reached an all time high of 4.16, this is going to be an exciting summer. You should consider doing a post on cheap dates for maried folks.
We are renting a 3 bedroom 1 1/2 bath for $775. Our utilities can be outrageous because it’s an old house (it broke $300 in the winter and that’s keeping thermostat on 73ish!!) it’s old but a new, modern home of the same size is easily $1200. Seems steep to me for renting because I could pay a mortgage for that but compared to some of y’all it’s nothing.
Another reason to love the south I guess.
We have very low rent for the area we are in. We pay $1525 and its about to go to $1570. I am always looking to move and things next door or two blocks away are either at or around $3000. We used to pay higher rent but when the economy tanked we asked for a rent decrease and told the building owner we would have to move without one.
Before we moved here my husband was paying a mortgage on two houses and that was close to 3k. Moving here was a financial relief. We also live right where we play and work so we can keep fuel costs low.
I'd have to strongly disagree with you there. Even if we did have the additional income I'd much rather be renting an apartment. The housing market with all the foreclosures and people losing a lot of money from home values dropping so fast do not make home ownership worth it any more.
I feel I'm better off keeping my money and/or investing while living fairly comfortably in a decent apartment or condo than worrying about whether the value of my home and/or neighbors will drop more than half or worse: go into foreclosure.
You did say "most" renters but I suspect more financially savvy folks who have been following this mess over the last 3-5 years would disagree.
I suspect more financially savvy folks would know that you "buy low, sell high." Now is the perfect time to buy in most places. With any investment there is risk. A house is actually a fairly secure investment (depending on if you're smart enough to buy the right one). So I would have to respectfully disagree.
Perfect time to buy, assuming you are not moving soon, that is. If you're planning on moving in the next 2-3 years it is totally understandable and not NECESSARILY the best financial decision.
WOW at these numbers. I live in a suburb outside of Chicago and pay $725 for a 2br, 1ba that includes heat and water. I know I wouldn't be able to find something like that inside the city and county limits. I'm a firm believer in keeping my housing costs below 30% of my income when possible.
Whew! We moved out of MD because we wanted more bang for our buck. So glad we did. I understand the fear of homeownership but when you buy within your means it's no different than renting.
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Hell yea it is! We live in a one bedroom place right now and they're charging us almost 900$ a month
A 2 bedroom (which we really need right now) is like 1200$ a month. We can barely pay for our home now and that's if we need to buy food or not. It's RIDICEROUS!! Makes me cry sometimes.
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That's true. I can't spend on anything else but the rent and food.
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