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About The skanner. (Portland, Or.) 1975-2014 | View Entire Issue (June 22, 2016)
June 22, 2016 The Skanner Page 9 News By JOSH BOAK Associated Press MOUNT PLEASANT, South Carolina — It’s a troublesome story play- ing out across America in the 10 years since the housing bubble peaked and then burst in a ruin- ous crash: As real estate has climbed back, home- owners are thriving while renters are strug- gling. For many longtime owners, times are good. They’re enjoying the beneits of growing equi- ty and reduced mortgage payments from ultra-low rates. But for America’s growing class of renters, surging costs, stagnant pay and rising home values have made it next to impossible to save enough to buy. “ rental in Pittsburgh — made it impossible to save enough to buy a home. With their rent going up again, the cou- ple moved to a cheaper suburb in hopes of re- paying their student debt and saving for a starter home. “The best school dis- trict is Mount Pleasant, and we would like to be there,” said Fabie, 27. “But if you’re lucky you can get some beat-up homes for around $300,000.” An exclusive analy- sis by The Associated Press of census data covering over 300 com- munities found that two major forces are driv- ing a wedge between the fortunes of renters and homeowners: • Historically low mort- gage rates have en- abled homeowners to nities at sharp discounts and rented them out. Many of the new tenants belong to Generation X households — ages 35 to 51 — that began renting ater the crash, according to the Harvard Universi- ty Joint Center for Hous- ing Studies. Rents have also jumped in areas that absorbed many young college-edu- cated job hunters. These workers have increas- ingly clustered in areas, including Boston, San Diego and Washington, with abundant jobs but high housing costs. The result is delayed home ownership for a popula- tion group that histor- ically had the means to buy. The AP analysis also found a contrasting belt of stability across the Midwest where the Half of all renters are now considered cost-bur- dened, compared with just 24 percent in 1960 The possible conse- quences are bleak for a nation already grappling with economic inequal- ity: Whatever wealth most Americans possess mainly comes from home equity. An enlarged rent- er class means fewer Americans can build that same wealth and inan- cial security. Nearly two-thirds of adults still own homes. And some who rent do so by choice. Yet owner- ship has become a more distant dream for the many Americans who still regard it as a route to prosperity and pride. The problem has become especially severe in ar- eas that ofer the best job prospects as well as those that have been battered by foreclosures. “It doesn’t paint a pret- ty picture,” said Svenja Gudell, chief economist at Zillow, the online real estate database company. “You’re really blocking out a group of buyers from owning a home. They’re truly living pay- check to paycheck, and that does not put them into a good position to buy.” Joe Fabie and his wife face just such a bind. They moved to Mount Pleasant, just over the bridge from historic Charleston, South Car- olina ater law school in Pittsburgh. The sub- urb’s pastel-hued harbor vistas, tin-roofed hous- es and Spanish moss- adorned live oaks were enchanting. But the rising rent on their one-bedroom apartment — more than for their three-bedroom reinance and shrink their monthly pay- ments, thereby reduc- ing a major household cost. The median annu- al mortgage expense for a U.S. homeowner has dropped by $1,492 since 2006. • A combination of fore- closures and new col- lege graduates crowd- ing into the strongest job markets has raised demand for rentals. Renters accounted for all the 8 million-plus net households the United States added in the past decade. Home ownership has dipped to 63.5 percent, near a 48-year low. That demand has driv- en up rents, which in turn have prevented or delayed people from buy- ing irst homes. The government says if you spend more than 30 percent of your pretax pay on housing, you are “cost-burdened.” The to- tal number of renters in that category has jumped more than 30 percent in the past decade, to 21.2 million. Half of all rent- ers are now considered cost-burdened, com- pared with just 24 per- cent in 1960. These trends are re- lected in how and where Americans live. Subur- ban cul-de-sacs built for owners are now tilting toward rentals, especial- ly in such areas as Orlan- do, Las Vegas and Tampa, where the bubble and crash were especially in- tense. Ater the bust, inves- tors bought distressed houses in these commu- housing boom and melt- down had little efect on homeownership. Rates of ownership remained relatively stable, for ex- AP PHOTO/CHUCK BURTON 10 Years After Housing Peaked, US is More of a Renter Nation In this Tuesday, April 19, 2016, photo, Joe Fabie, right, and his wife, Christi, pose for a photo in front of their rental home in Charleston, S.C. The Fabies left Mount Pleasant, S.C., to rent somewhere cheaper. Both have law school debt and are saving to buy a home. ample, in Minneapolis, St. Louis and Kansas City, Missouri, where starter homes are comparatively afordable. But the transforma- tions have been vast in other areas, particular- ly in smaller suburbs where much of the coun- try lives. Both before and during the housing boom, farm- land around the country was bought cheaply and developed into houses, schools and shopping plazas — a build-out that ignited homeownership. Now, in a twist, many of those cul-de-sacs are oc- cupied by renters living in homes whose former owners lost them to fore- closure. To see just how drasti- cally the foreclosure cri- sis transformed certain neighborhoods from the domain of owners into blocks of rental proper- ties, consider the Orlan- do suburbs. The shit has been vivid over the past ive years in the Piedmont Park neighborhood of Apop- ka, a former agricultural hub now crowded with housing developments. Where one in 10 homes was once a rental, now more than a third are. Read the rest of this story at TheSkanner.com