A posting at Barry Ritholtz's The Big Picture blog this morning is of a Federal Reserve "Report on the Economic Well-Being of U.S. Households in 2015," and it has a few telling data points on housing.
One is this: Among the two-thirds of homeowners with a mortgage, the average monthly mortgage payment is $1,225, with a median of $1,100.
Among renters, the average rent payment is $855 and the median payment is $760. Both the median reported mortgage and the median reported rent have increased relative to 2014, when they were $1,068 and $700 respectively—although the increase in median mortgage payments is not statistically significant.
Which points up the fact that the increase in the median rent payment in the 12 months from 2014 to 2015 is statistically significant.
Following the poor employment report from Friday, one of the few areas some economists and analysts took encouragement from was evidence of continued improvement on the wage front. Here, New York Times contributor Jeff Sommer notes that "Workers' Wages Rebound While Wall Street Squirms."
Corporate profits may get squeezed if wages go up, but consumer households get to spend more, can save more, and can make neighborhoods stronger if their incomes are on the rise.
Our guess is that, particularly where wages are growing--which Pew Research spotlights here--you will begin to see an inflection point on shifts from renting to owning. That 8.5% spike in median rents in one year is a plot line, and where wages are growing faster, homeownership becomes not only the smarter option, but a viable one.