NEW YORK, NY – As rent growth in New York City continues to outpace income growth, many residents will have to devote more of their income to rent in the coming year.  New York City renters are expected to spend nearly two-thirds (65.2 percent) of their income on rent in 2016, up from 59.7 percent in 2015, according to StreetEasy’s new annual report, the State of New York City Rent Affordability.

New Yorkers in four of the five boroughs can expect to face a higher rent burden in 2016 than last year. Brooklyn continues to be the least affordable borough, where renters can expect to spend 65.4 percent of their income on rent, followed by the Bronx (54.1 percent). But, Queens renters are expected to see the greatest increase in the typical rent burden among all boroughs. Between 2015 and 2016, the amount of income Queens renters are projected to spend on rent will increas from 43.5 percent to 51.6 percent. Manhattan follows shortly behind Queens with a median rent-to-income ratio of 49.1 percent in 2016. Staten Island is the only borough in the city to be considered affordable for renters, with a median rent-to-income ratios of 27.9 percent in 2016.

Renters in East Brooklyn, Upper Manhattan and the South Bronx are spending more of their incomes on rent compared with renters in other neighborhoods. In Manhattanville, for example, the median rent-to-income ratio is forecasted to reach 119.5 percent in 2016, meaning the median rent is far greater than the typical household’s total annual income. Chinatown, Small Italy, Mott Haven and North New York all have median rent-to-income ratios greater than 100 percent.

“With a rental vacancy rate below 3.5 percent, the supply of rental housing across the city is extremely low, which places upward pressure on prices and even more competition among renters. There’s policy momentum in place here, but addressing the supply side is only half the battle. No other factor is more fundamental to the city’s growing rent burden than lagging income growth,” says StreetEasy data scientist Alan Lightfeldt. “Until income growth catches up with rent growth, the rent affordability problem will loom large on New York households.”

Conversely, Manhattan is the only borough where renters will see a smaller rent burden this year, primarily because Manhattan’s forecasted income growth (1.0 percent) exceeds the forecasted growth in median rent price (0.2 percent). As a result, the median rent-to-income ratio in Manhattan is projected to decline slightly from 49.5 percent in 2015 to 49.1 percent in 2016.

The complete StreetEasy State of New York City Rent Affordability Report with additional analysis, neighborhood data and graphics can be viewed at StreetEasy.com

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NEW YORK, NY – Mortgage rates increased modestly this week, with the benchmark 30-year fixed mortgage rate ticking up to 3.75 percent, according to Bankrate.com’s weekly national survey. The 30-year fixed mortgage has an average of 0.19 discount and origination points.

The larger jumbo 30-year fixed stepped lower to 3.67 percent, and the average 15-year fixed mortgage nosed up to the 3 percent mark. Adjustable mortgage rates were higher as well, albeit modestly, with the 5-year ARM increasing to 3.13 percent while the 7-year ARM crept higher to 3.37 percent.   

Mortgage rates reversed last week’s go, posting the first increase since mid-March. But the movement was pretty tame as not much changed in the previous week – we saw more mixed news on the economy against the backdrop of economic weakness and accommodative central banks overseas. Still, mortgage rates are at levels that prior to this month would have been the lowest since 2013, so nobody’s mortgage refinancing is in jeopardy and nobody is being priced out of the market based on mortgage rates.  With the Federal Open Market Committee meeting next week, don’t expect huge mortgage rate moves beforehand as markets await the Fed’s thoughts on interest rates and the economy.

At the current average 30-year fixed mortgage rate of 3.75 percent, the monthly payment for a $200,000 loan is $926.23. 

SURVEY RESULTS

30-year fixed: 3.75% — up from 3.72% last week (avg. points: 0.19)

15-year fixed: 3.00% — up from 2.99% last week (avg. points: 0.16)

5/1 ARM: 3.13% — up from 3.11% last week (avg. points: 0.20)

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in 10 top markets.

For a full analysis of this week’s go in mortgage rates, go to www.bankrate.com

The survey is complemented by Bankrate’s weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. The majority of panelists – 69 percent – predict that mortgage rates will remain more or less unchanged in the coming week. The remaining 31 percent of participants expect further increases in mortgage rates. Fascinatingly, none of this week’s respondents forecast a decline in mortgage rates over the next seven days.  

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ARLINGTON, VA – The National Apartment Association (NAA)’s first global alliance partner, the United Kingdom Apartment Association (UKAA), launched last week in London. With momentum building in the UK’s residential rental sector, UKAA is the first cross-industry organization in the country dedicated to improving the professionalization of multifamily housing.

“NAA is keen to bring industry training, best practices and networking opportunities to the UK, and to support those who are investing in the U.S.,” says NAA President & CEO Doug Culkin, CAE. “In addition, our U.S. members are increasingly seeing opportunities for global growth and are looking to NAA for guidance when entering a new market. Our partnership with UKAA will be invaluable to our association as we address the growing need for a global rental housing industry.”

With more than 9 million renters in the UK, there is an opportunity for apartment communities as an asset class. UKAA aims to differentiate the multifamily housing industry from “amateur ad hoc” rental services provided by small-scale owners that currently make up the majority of the rentals in the UK.

“This evolution of the rental sector is making some fascinating dynamics and raising many questions about what renting in the UK should and will look like,” says Roger Southam, Chairman of Chainbow and Founder of UKAA. “There is clearly a case for using the extensive experience gained by the USA and working together to make a more professional market to ultimately give renters a better service.”

Added UK Housing Minister Brandon Lewis, “I welcome the UKAA as a body that can help build the capabilities of the build to rent sector in this country, bringing together the needs of private renters with the institutional capital that wants to invest in meeting their demands.”

UKAA member benefits include access to NAA’s research and information databank, customer service and multifamily educational platforms, suppliers’ forum, access to NAA operators, a discount to the annual NAA Education Conference & Exposition, and the opportunity to work with existing organizations to make an institutional asset class.
Current members include Atlas, Hermes, Greystar, Manchester Life and Savills, as well as suppliers including Roomservice by CORT and Yardi. UKAA is working in conjunction with other industry organizations to establish regional branches—already underway in Manchester and Scotland.

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