New study finds people spending more income on rent

New study finds people spending more income on rent

A new study finds millions of Americans are spending more than half of their paychecks on rent. Local real estate experts say it's a frustrating  situation for many in New Orleans.

Ask almost anyone in the city, and they can relate.

"My rent has already increased over the last few years," Gabrielle Stanton said,

Some are paying more, while others can't find any affordable housing.

"Young people especially who are coming into town, first job or something - that's pretty hard to do," Paul Powell said.

A nationwide study just released by Harvard University found that more and more people are being forced to rent as opposed to buying a home because of the price.

"Just based on how life is for younger people, to come up with a down payment, it prohibits the purchase. They can come up with the monthly rent, but coming up with the down payment and closing costs is a great deal of money," said Keller Williams realtor Fred Buras.

The study also found that the number of renters dedicating at least half of their income toward housing hit a record high at 11 million people.

Buras said you shouldn't spend any more than 30 percent of a paycheck on housing.

"The norm, if you purchased a home, the most that say, Fannie May or Freddie Mac would really want you to spend is maybe 28 percent per month of your gross income," Buras said. "I've seen people pushing it up to 50."

Buras attributes high housing costs in New Orleans with the boom of Hollywood South, when an influx of people with big bucks to spend influenced the market. Locals noticed the change.

"New people coming in, they say there's a lot of new money coming from outside, but it's just hard to fathom that people pay that much for a house," resident Judy Filipich said.

The bad news: Buras doesn't predict a drop in prices, rentals or homes for sale anytime soon.

The Harvard study also found the average age of renters is increasing. It's not just 20-somethings, but more people between the ages of 30 to 49 are paying month-to-month, too.

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