You Make $100,000? It Might Not Be Enough to Buy a Home
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Here's your Money Briefing. I'm J.R. Whelan at The Wall Street Journal in New York. More and more Americans are getting priced out of the housing market while making a six-figure salary. We'll check in with a Wall Street Journal reporter in a moment to go over the numbers. First, some money and market news you should know. If you've noticed prices going down at your local supermarket, you might have German discount chains Aldi and Lidl to thank. They're snatching up a larger share of grocery sales in the U.S. by offering a smaller selection at lower prices.
What is driving six-figure earners to rent instead of buy?
And U.S. grocers are lowering prices on staples like milk and eggs, but they're upping the ante by adding products that the discounters aren't known for, such as fresh foods. But that's not where the food battle ends. Aldi and Lidl are now going beyond their no-frills model, adding more produce and baked goods and renovating store interiors with brighter lighting and new layouts. Women have made significant gains in some fields where men once dominated, 50 years since they began entering the workforce en masse. But the gender lines aren't gone completely. A Wall Street Journal analysis of five decades of employment data shows that since 1970, women have made the biggest gains in the fields of psychology, education, administration, and financial management.
But they've actually lost ground as computer programmers, chefs, and inspectors and testers. The sectors with the most even mix of men and women are business and finance, along with legal and sales. There are still many jobs that continue to be done overwhelmingly by one sex or the other. For instance, women are still more likely to be secretaries or nurses, while men account for 85 to 95 percent of firefighters and police officers.
A six-figure salary can help buy a lot of things, but more Americans are finding out it's not enough to buy a house. This year, about 20% of U.S. households earning $100,000 are still renting their homes, and homebuilders as well as investors are betting that trend will continue to grow. Wall Street Journal reporter Ryan Dezember is here to explain. So, Ryan, it's not unusual for people to rent in pricey cities like New York and San Francisco, but what other regions of the country have seen renting on the rise?
Pretty much everywhere. You can sort of follow the good jobs and find these places. So you've got Denver, places like San Antonio, Houston, Dallas, Austin, Seattle, even Cincinnati, you know, Nashville, Atlanta. Pretty much most major metropolitan areas had an increase. And in most areas, it's the fastest growing type of tenant is someone who earned six figures or more.
How are the housing developers responding to this growth in renting?
Well, it's more investors and to a degree, I guess, home builders. There's two ways to do it. There's people who are buying existing homes that are turned into rentals. Actually, there's three ways. There's a lot of luxury apartments going in, downtowns, close to work, sort of catered to a A younger worker, someone who may not have children, wants to sort of be in the center of the city, that sort of person. And then the rental home investors are taking it a step further now, no longer content to just wait till a house hits the market and buy it and dress it up and make it nice and turn it into a rental. They're building houses that are straight to rent, including some that are whole neighborhoods that are just, they look like any other subdivision.
They might have a shared pool or something that might be more common in an apartment complex, but they're standalone rental homes.
Why are six-figure earners an attractive segment for the home rental companies?
Well, they can charge more rent, frankly. We quote Dallas Tanner, who's the 39-year-old CEO of Invitation Homes, which is the biggest rental company in the country. They emerged from the housing crash. And he said very early on, they realized that it was about the same expense for them to maintain a house that they could rent for, say, $2,000 as it was for a house that they could rent for $1,300.
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