By most accounts, real estate in the U.S. is on the rebound, and the housing crisis is firmly in the rearview mirror. And yet for more than half of Americans, housing remains a major cause of financial stress. Why?
The cost of rent and mortgages.
According to new research by the MacArthur Foundation, 52 percent of American adults have had to make major sacrifices in order to cover their mortgage or rent payments — including racking up credit card debt, delaying saving for retirement and even taking on a second job.
And its not just homeowners who are feeling the pressure: Rents are skyrocketing as well. In fact, a recent RealtyTrac study found that one in three Americans live in a housing market where average rent payments exceed 30 percent of the area’s median pay.
So what can you do?
LearnVest generally recommends that homebuyers devote no more than 28 percent of their monthly take-home pay to housing costs. But in competitive housing markets like parts of California or New York City, it’s becoming increasingly rare to snag a home under those guidelines.
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