The cost to rent housing grew at a faster rate than home values in April, as rising rents make it difficult for many consumers to afford a mortgage, according to Zillow's monthly real estate report.
The Zillow Rent Index, which measures the median estimated monthly payment for all home types nationwide,
Rental costs have risen steadily for years and now eat up a much larger portion of consumers' monthly income, Zillow said. That makes it more difficult for first-time homebuyers to qualify for a mortgage because they have less money to set aside for a down payment.
The "rental affordability crisis [is] keeping renters renting longer and feeding into the high demand that is contributing to rising rents in the first place," said Stan Humphries, Zillow's chief economist. "The cycle will be difficult to break."
Rents rose at the fastest pace in April in San Francisco; San Jose, Calif.; Denver and Kansas City. Home values rose quickest in Denver, San Jose, San Francisco and Dallas-Fort Worth.
