Renters Face Twice the Financial Burden
By Hank Russell
A recent study showed that New York homeowners spent nearly one-third of their incomes on housing, the tenth most in the nation.
According to WalletHub, New York residents who own a home spent 30.41% of their median monthly income on housing. The study also found that homeowners spend an average of $2,178.55 a month on mortgage payments and home energy costs.
Hawaii had the highest percentage of monthly incomes going to housing at 50.02%, while Iowa had the lowest with 17.26%, based on data from WalletHub.
New York was also 10th on the average mortgage principal and interest and 10th in the average monthly energy costs, according to WalletHub.
Renters had it tougher. WalletHub found that New Yorkers who rent spent nearly two-thirds of their monthly incomes — 61.28% — on housing. Only Hawaii had a higher percentage with 62.52%. Oklahoma renters spent the least, with only 20.29% of their monthly incomes going to rent.
WalletHub offered advice for saving on housing costs. That includes taking out a 15-year rather than a 30-year mortgage, saving money on interest; staying on top of bills; making a large down payment on a home, as opposed to just putting down 20%; minimizing the use of utilities, such as lowering the thermostat a few degrees in the winter and raising it a few degrees during the summer, turning off the lights when leaving the house and taking shorter showers; and improving one’s credit before buying.
“Homeowners and home buyers have faced whiplash over the past few years, with housing prices soaring and interest rates fluctuating from historic lows back up to the highest rates in more than a decade,” said WalletHub analyst Chip Lupo. “In the most expensive state, housing costs can take up around 50% of the median income. In order to manage expensive mortgage payments and other key housing costs, it’s important for homeowners to budget effectively.”