Ready for some fresh data on the U.S. economic “recovery?”
According to Census data parsed by researchers at Harvard University, more than 11.3 million Americans pay over half their monthly income on rent – a record high (and a 28 percent increase from 2007).
“Significant erosion in renter incomes over the past decade has pushed the number of households paying excessive shares of income for housing to record levels,” Harvard researchers found.
The median asking rent for a vacant unit in the third quarter of 2013 was $736 – a record high.
“Stagnant incomes and increased demand for cheap apartments spurred the rise,” the researchers added. “Between 2007 and 2012, real median renter incomes fell by 7.6 percent, based on Census data compiled by the Joint Center. The number of renters climbed 11 percent between 2007 and 2011, U.S. Department of Housing and Urban Development data show. A Census report released this month found that 31.6 percent of Americans lived in poverty for at least two months between 2009 and 2011, an increase from 27.1 percent over the 2005 to 2007 period.”
All of which explains why homeownership has plunged to a 20-year low of just 65 percent …
Who’s profiting off of this dynamic? And how?
“Wall Street landlords, who have access to cheap funding, demand a high cap rate, and as a result rents keep going higher and higher, and since the cost of capital is still sufficiently low to where even a less than fully rented out complex will generate a positive return, there is no impetus to lower prices in order to generate more demand,” the website Zero Hedge explains.
In other words the same government that’s squeezing every nickel out of America’s poor working saps (and, increasingly, non-working saps) is mainlining cheap capital to the same Wall Street bankers whose reckless housing lending landed us in this mess in the first place.
Sheesh … and we wonder why there’s a wealth gap in this country?