The morning meeting with Al Tompkins is a daily Poynter briefing with story ideas to consider and other topical context for journalists, written by Al Tompkins, Senior Faculty. Sign up here to have it delivered to your inbox every weekday morning.
The percentage of a household’s income that goes toward rent is called the rent-to-income ratio. In the United States, the national average rent-to-income ratio just hit a 20-year high. Moody’s Analytics says:
The national average rent-to-income (RTI) reached 30% for the first time in our 20+ year tracking history, up 1.5% year-on-year or 0.2% from the third quarter, marking the growth rate in the second half of the year remained constant last year.
Rising mortgage rates meant that many households were discouraged from buying a house and potential buyers stayed renters. As a result, demand for housing increased and drove up prices. As the gap between rental growth and income growth widens, Americans’ wallets are feeling financial distress as wage growth lags rental growth.
The stress of renting costs is experienced differently across the country. Moody’s says some states have recently seen average rental costs fall:
At the state level, similar to the third quarter, three states exceeded the 30% rent-burdened threshold: Massachusetts (32.9%), Florida (32.6%) and New York (31.2%).
In the last three years it was Nevada (+4.9%), Florida (+4.8%), Alabama (+4.2%), South Carolina (+4.2%), Arizona (+4.1 %) and New Mexico (4.0%). experienced the largest increase in the state’s average rent burden, reflecting significantly higher (>~20%) rental growth than the respective median household income growth during the three-year period.
In 2022, the rent-to-income ratio fell in five states: Maryland (-0.62%), Oklahoma (-0.49%), Arkansas (-0.16%), Minnesota (-0.08%) and Utah (-0.02%).
In the fourth quarter, nine states (Georgia, Maryland, Oklahoma, Nevada, Utah, Wisconsin, Pennsylvania, Texas and Alabama) experienced some relief in rent burdens, including Georgia (-1.7%) and Maryland (-1.2% ), both of which were average rental price declines at the state level.
According to Realtor.com, there’s good reason to expect rental prices to cool this year:
The deceleration from recent highs is consistent with what we have seen in recent sales data, suggesting a more typical seasonal slowdown is returning to the rental market.
Despite the winter slowdown, Realtor.com forecasts that rental growth will continue in 2023, but at a slower pace.
On the demand side, rising housing costs due to high mortgage rates could keep more potential buyers in the rental market longer as consumer sentiment to buy a home remains subdued even after this month’s uptrend. Additionally, the slowdown in new home construction could also delay home shopping plans and further increase rental demand.
On the supply side, the number of rental properties could gradually increase as housing activity continues to shift towards multi-family buildings. This additional supply of multifamily homes could shift the market balance, increase the still-low rental vacancy rate and help dampen recent rental growth driven by excess demand.
- The average asking rent in the top 50 metro areas fell to $1,712, down $22 from last month and $69 from July’s peak.
- Rents in Sun Belt metropolitan areas slowed to 0.9% Y/Y. Jacksonville, FL (-0.8%) and Austin, TX (-0.6%) saw their first year-on-year slumps in at least 20 months.
- Faster rental growth in the Midwest like Indianapolis, IN (9.6%) and Kansas City, MO (8.7%) could raise affordability concerns.
- Rental growth is cooling off for all apartment sizes. Rent by Size: Studio: $1,446, up 5.9% ($81) year-on-year; 1-Bed: $1,596, up 3.2% ($49); 2-Bed: $1,877, up 2.6% ($48).
See the latest home rental prices in America’s 50 largest metropolitan areas here.
For the first time in more than 120 years, Japan will record fewer than 800,000 births this year, the country’s health ministry says. That’s a problem because Japan also has one of the longest life expectancies in the world. In short, the country is aging and not enough young people are coming to secure the future.
Young people cite a few key reasons for not having children, including a lack of affordable childcare and the high cost of housing.
Read more from CNN, Reuters, Wilson Center, NHK and NikkeiAsia.
The Bulletin of the Atomic Scientists holds the “Doomsday” clock, which symbolizes how precariously the group believes humanity is close to nuclear war. Largely because of the Russian invasion of Ukraine and uncertainty about Russia’s intentions, the group advanced the clock by 10 seconds, which is the closest to the “Judgment Day” the clock has ever been.
The clock has been at 100 seconds to midnight since January 2020 and is now at 90 seconds to midnight. Not only the war in Ukraine has brought the clock forward, but also the climate crisis, cyber threats, biological threats and North Korea’s non-stop nuclear weapons tests.
“We live in a time of unprecedented danger, and the doomsday clock reflects that reality,” said Rachel Bronson, president and CEO of the Bulletin of the Atomic Scientists. The group added:
Russia’s invasion of Ukraine has increased the risk of using nuclear weapons, raised the specter of using biological and chemical weapons, crippled the world’s response to climate change, and hampered international efforts to address other global problems. The invasion and annexation of Ukrainian territory have also violated international norms in a way that could encourage others to take actions that challenge previous agreements and threaten stability.
Watch a video of the virtual press conference.
The Economic Times (in India) is among several news outlets proclaiming that the popularity of lab-grown diamonds is disrupting the diamond industry. It’s an interesting story as you approach Valentine’s Day. BusinessWire reports that the synthetic diamond industry in the United States is a $14 billion business and is expected to continue growing at 8% per year for the next seven years.
There is a significant cost gap between natural diamonds and manufactured industrial diamonds. Synthetic diamonds can be purchased for as little as $800 per carat up to $1000 per carat, depending on the industry standard.
Currently, around 1% of the diamond jewelry market worldwide is held by synthetic diamonds. Despite this, the use of synthetic diamonds in the manufacture of jewelry is expected to increase as a result of ongoing research and development in the technology required for the manufacture of synthetic diamonds.
The story behind how diamonds became a must-have for brides is one of advertising genius.
When I rented a car in Nashville a week ago, I was surprised to see how many electric cars Hertz had in the lot. According to Axios, Hertz just announced plans to buy 100,000 electric cars from Tesla, 175,000 from GM and 65,000 from Polestar.
Even though fewer cars were purchased in the US in 2022 than the year before, down for the first time in over a decade, more of those vehicles were electric. U.S. passenger cars declined in 2022, but electric vehicle numbers increased by a whopping 65 percent, up nearly two-thirds from 2021.
Electric vehicles accounted for 5.8 percent of all new vehicles sold in the US, up from 3.1 percent a year earlier.
Projections are that the number of electric vehicles sold in the US will surpass 1 million in 2023. And keep in mind that this will be the sale of mostly expensive vehicles as the range of affordable electric vehicles is not going to increase dramatically this year.
The median price of an electric vehicle sold in the US last year was $61,448, down 5.5 percent from 2021.
Life moves pretty fast so please try to keep up. The selfie trend #nofilter is in and now the cool people are buying mirrors for their selfies.
Glad I could help.