Page 7 - ATODAY
P. 7
U.S. NEWS A7
Thursday 10 December 2015
Consumer credit US Financial Front:
rises $16B in U.S.
through October More than half of US renters older than 40; study
JOSH BOAK renters.
AP Economics Writer
WASHINGTON (AP) — The share of rent-
U.S. consumers borrowed
more heavily for auto and ers being finan-
student loans in October,
taking out debt that helps cially burdened
them find jobs and com-
mute to work. has dropped
The Federal Reserve said
this week that consum- from their 2011
er borrowing rose $16 billion
in October to $3.5 trillion. peak, but their
But the pace of borrowing
decelerated sharply from total numbers
the $28.5 billion increase in
September. continue to
Nearly all of the Octo-
ber gain came from the climb.
category that covers
auto and student loans, Construction
while credit card borrow-
ing edged up a mere $200 has done little to
million. The increase sug-
gests that more Americans ease the prob-
are borrowing to improve
their educational skills and lem. Permitting
upgrade their cars and
trucks, instead of relying for multifamily
on debt to fund their daily
shopping and emergency construction has
expenses.
Many economists expect increased a ro-
that consumer spending
will be relatively healthy bust 17 percent
in the coming months be-
cause of strong job gains this year.
that have bolstered auto
and home sales for much But the median
of 2015. Yet a struggling
global economy has tem- A rental sign is seen outside a property in Denver. The majority of U.S. renters are now older than 40, a rent on a newly
pered U.S. growth as the fundamental shift over the past decade that reflects the lasting damage of the housing crash and an aging built apartment
year draws to an end. population, a study said Wednesday, Dec. 9. was $1,372 a
The Labor Department re- month in 2014,
ported last week that em- (AP Photo/David Zalubowski) about $500 more
ployers added 211,000 jobs
in November and 298,000 JOSH BOAK Census Bureau data. That more of the baby boom- a month than
in October. The unemploy-
ment rate held steady at AP Economics Writer amounts to 22.4 million ers born after World War II what about half of renters
5 percent last month. The
report showed evidence WASHINGTON (AP) — The households. are growing older, which could afford without be-
that workers pushed to the
sidelines during the Great majority of U.S. renters are A decade ago when the has also caused sharp in- ing financially burdened.
Recession and sluggish six-
year recovery are filtering now older than 40, a fun- housing bubble peaked in creases in the number of Much of the apartment
back into the job market.q
damental shift over the 2005, 47 percent of rent- renters between the ages construction has catered
past decade that reflects ers — or 16.4 million house- of 55 and 69 during the to wealthier households
the lasting damage of the holds — were older than past 10 years. During that looking to live near restau-
housing crash and an ag- 40. Their share was 43 per- same period, the United rants, parks, gyms and of-
ing population. cent in 1995. States has added a total fices. The number of rental
This finding in a report re- The increase in older rent- of 9 million renters — in- households earning in ex-
leased Wednesday by ers corresponds with a cluding younger millenni- cess of $100,000 has risen
Harvard University’s Joint surge in foreclosures af- als recent out of college. by 1.6 million in previous
Center for Housing Stud- ter the housing bubble But demand has out- decade.
ies overturns the assump- popped. Since the 2008 paced supply and caused Even people with decent
tion that the rental boom financial triggered by the prices to rise. incomes between $30,000
is only the result of twen- housing bust, there have Rents increased 7 percent and $44,999 can’t keep
ty-somethings flocking to been roughly 6 million between 2001 and 2014 up with the rent in the
hip urban centers. Single- completed foreclosures, after adjusting for infla- wealthiest markets. More
family houses are a grow- according to CoreLogic, tion, while incomes fell 9 than 70 percent of rent-
ing share of rentals. And a property data firm. percent, the report said. ers at this income level
affordability problems Many of these are former The result is that a larger are classified as financially
are mounting as rents rise owners transitioned to number of Americans burdened in Washington,
faster than wages, while renting. must devote more than 30 DC, San Francisco, Los
apartment construc- “Middle-aged house- percent of their income to Angeles, New York City
tion increasingly targets holds in particular bore a rent, a level that the gov- and Miami. “We’ve got-
tenants with six-figure in- big brunt of the housing ernment considers to be ten ourselves into a deep
comes. crash,” said Christopher financially burdensome. hole — and it’s not going
Nearly 51 percent of rent- Herbert, managing direc- Over the past decade, to be easy to get out of it,”
ers have celebrated their tor of Harvard’s Joint Cen- that number has jumped Herbert said. “We expect
40th birthday, according ter for Housing Studies. from 14.8 million to 21.3 the affordability problem
to the report’s analysis of But Herbert also noted that million, or 49 percent of all will persist.”q
