Austin's skyrocketing rent prices force locals to make major cuts in these areas
Renting in Austin comes at a high cost — and we're not just talking about the skyrocketing prices. According to Zillow, unaffordable rent prices in U.S. cities are forcing residents to cut back in important areas. A recent survey from the real estate website reveals what renters are giving up to pay for that apartment each month.
Zillow says renters should expect to spend about 30 percent of their monthly income on rent, but in Austin the number is higher. In the first quarter of 2015, the percentage of monthly income spent on rent was 31.8 percent, up more than 1 percent from the previous year, leaving Austinites with high-burden rents that result in major cuts elsewhere.
The first thing to go? Savings. Zillow reports that renters who spend more than 30 percent of their income on rent have a median savings rate of zero. And nearly 60 percent of renters with high burdens "said they could not cover three months' worth of expenses if they were to lose their main source of income." On the flip side, the typical renter with a lower burden sets aside 5 percent of monthly income for savings. Still, 44 percent of those renters cannot cover three months of expenses.
High rents are also forcing residents to cut back on healthcare and plans for retirement. In the last year, 40 percent of those with high rents skipped the dentist and 25 percent skipped the doctor. In addition, 27 percent of young adult renters with high burdens haven't given any thought to retirement.
The outlook is better, if only slightly, in other Texas markets. In Houston, 30.5 percent of monthly income is spent on rent. Dallas and San Antonio are below the threshold, at 28.8 percent and 29.7 percent, respectively.