Rental costs have been on the rise, outpacing stagnant salaries and widening the affordability gap, according to a new study by DePaul University.
"After the housing crisis, households shifted to renting for a number of reasons," said Geoff Smith, co-author of a study on the affordability gap and executive director of DePaul University's Institute for Housing Studies. "The weak economy, homes lost to foreclosure, increased difficulty receiving a mortgage, a lack of confidence in the housing market and flexibility with renting all contributed to a boom in the rental housing market."
Households that spend more than 30 percent of their monthly income on rent are often considered "rent burdened."
Higher rents limit savings and thereby extend the time needed to accrue a down payment for a home for those who wish to own, the study revealed.