Boston homeowners end each month with a pot of money compared with the city’s renters, according to a new analysis from real estate research portal PropertyShark and listings site RENTCafé.
The average Boston renter actually ends the month with a $2,244 deficit. The average owner comes out ahead $2,057, according to the analysis. That makes Boston one of the better cities nationwide in which to own. From the report:
We determined the discretionary income in each city by subtracting living and housing costs from the median household income. The median household income of a homeowner and a renter as well as housing costs were extracted from Census data, while living costs, such as food, healthcare, entertainment, and transportation were taken from U.S. Department of Labor.
What explains Boston owners’ relative bounty come the end of the month vs. tenants’ pauperism? The differences in tenants’ and owners’ median incomes, for one. For another, the reality that rent in Boston can often outpace mortgage payments. Again, from the report:
... a renter in [Boston] is likely to take on a lot of debt. With an income of $3,397, and after paying the $3,175 median rent, you’d only end up with a couple of bucks to put towards your $2,466 of living costs, leaving the average renter with a mind-boggling debt of $2,244/month. No matter how much you’d try to save, it’s impossible to live as a single renter in the city by earning just the median household income, and even with someone to share the rent, saving would be an uphill battle.
According to the analysis, there has to be a “healthy balance” between income and housing costs (renting or owning). This probably explains why renters in relatively few cities appear to come out ahead. See the breakdown below. What are you experiencing?