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Rising rents could soon make these 10 US rental markets unaffordable

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Despite a booming economy and a strong jobs market, lagging wage growth and rising rents are starting to price many Americans out of several previously affordable rental markets, according to a new report by the personal finance site SmartAsset.

“The cause of the rent increase was split between two problems — large rent increases outpacing substantial gains in income, or stagnant income growth amplifying the impact of small rent increases,” reads the report.

To compile its list, SmartAsset compared rent prices from 2014 to 2017 and household incomes over the same period. It subtracted the 2017 rent as a percent of household income from the 2014 rent as a percent of household income and the cities with the largest difference, where the relative cost of rent went up the most, ranked first, and the city with the smallest difference ranked last.

In all, six of the top 10 cities with the largest rent increases are either in the Midwest or California. But many of the expected white hot Golden State markets, like San Jose and San Francisco, didn’t make the cut.

“New York, San Francisco and Los Angeles, three cities with traditionally high rents, actually saw their relative rent costs fall. This is due to large increases in the median household income in those cities,” reads the report.

Instead, Long Beach, Sacramento, and San Diego landed on the list in the number 3, 5 and 10 spots, respectively.

Detroit, MI took the number one position with the average market rent growing almost $400 dollars from 2014 to 2017. At the same time, the median annual household income grew by nearly $4,600.

Meaning, if the typical Detroit household wanted to rent the average apartment, it would need to spend just under 47 percent of its total income on housing costs alone — well over the accepted 30 percent industry standard. That’s up almost 10 percent from 2014.

New Orleans, LA came in second, where Airbnb usage could be to blame for the sudden increases in rent.

While the average rent increased by $330 in the Big Easy, or nearly $4,000 per year from 2014 to 2017, incomes are not rising very fast. The average household saw its income rise by just $1,500 over the same period. Rent as a percent of household income rose by only 9.1 percent from 2014 to 2017.

The average rent in Long Beach in 2014 was less than $1,600 per month, but demand outpaced new supply from 2014 to 2017, and the cost of rent jumped up to $2,100 per month.

And while incomes in Long Beach have grown, they haven’t risen enough to alleviate the new rent burden — monthly rent went from being just under 35 percent of household income to just under 42 percent from 2014 to 2017, an increase of 7 percent.

Rounding out the top ten were Philadelphia, PA (4), Charlotte, NC (6), Nashville, TN (7), Milwaukee, WI (8), and Columbus, OH (9).

“When residents are forced to devote ever-increasing portions of their paychecks to rent, the scenario not only impacts their ability to pad their savings accounts but also lowers their demand for other goods,” reads the report.

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New home? Prepare for the unexpected

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(NC) Buying a house, getting married or having your first baby are all major life events that are likely to affect your finances. But whether you’re in the midst of a major life event or not, it’s important to check in on your finances regularly to maintain good financial health.

Your financial health encompasses things like your spending, savings, borrowing and future financial plans. It also means dedicating a set amount of savings for unexpected future events. It can even include optional credit protection insurance, such as TD protection plans, to help cover your debt balances in case of death, a covered critical illness or total disability.

Even though it can be tough to think about the unexpected, life is unpredictable and it’s important to plan for the unexpected. Find more information at td.com.

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Mortgage pitfalls to avoid

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(NC) Throughout life, you may have moments where you’ll make a large purchase or invest in a costly item, like your family home. But whether you’re in the market for your first new property or already have a mortgage, leaving this asset unprotected can be costly.   

Insuring your housing financial debt, as well as debt for other big-ticket items like a new boat for your lakefront cottage or keepsake jewelry like an engagement ring, is a smart investment in your well-being.

To help protect your debt balances like a mortgage, your bank may have optional credit protection insurance products.

“Your home is one of your biggest assets, yet illness can happen at any stage of life. Worrying about your mortgage when the focus should be on health isn’t a situation anyone would wish for,” explains Shirley Malloy, vice president at TD. “Fortunately, we offer mortgage protection to provide coverage for your outstanding balance should you face a covered critical health event.”

Mortgage protection can be purchased whether you’re in the process of applying for a mortgage or already have a home financing solution. But what about protection options for credit card debt?

“Given the unprecedented circumstances of this year, many Canadians are trying to plan for the unexpected to protect themselves and their finances,” says Malloy. “TD balance protection plus is an optional product designed to help you deal with your credit card payment obligations in the event of a covered event, such as loss of employment.”

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Is your internet too slow? It’s probably not you

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(NC) We all know the aggravation of a school lesson that just won’t stop freezing or the family video call that looks more like a photo montage. And, as we adjust to the impact of COVID-19 on our day-to-day, that slow connection can have frustrating consequences.

Working from home and learning remotely, both need fast, stable internet, something not enough Canadians have yet. Even if you have fast devices in your home, if the infrastructure in your area is not optimal, your connection won’t be either.

Right now, cities have the infrastructure needed to ensure access. But rural and remote communities are hugely underserved, with fewer than half having high-speed internet, and fewer than a third of households on reservations have high-speed connections.

Fortunately, change is coming. The Universal Broadband Fund is backing projects across Canada right now to ensure the reliable, high-speed internet connections families need to work, study, access services online, and safely stay in touch with each other.

The fund existed before COVID, but as a response to the pandemic, its timetable has been moved up by four years to a target of 98 per cent of Canadians with high-speed internet access by 2026. With the faster pace, at least 90 per cent of us should be connected by the end of 2021.

The fund is focused on improvements in rural and remote communities across Canada to fix the disconnect between internet access for urban and rural households.  This means more remote work opportunities, better access to remote learning and safer access to healthcare, no matter where you live.

It’s not just for good connections at home, either. The improvements mean much better access to mobile networks on highways between remote communities. The result is better, safer navigation and access to emergency services for your family, even on the road in the middle of nowhere. Mobile projects will be focused on serving Indigenous communities and the roads leading to them.

The shape these improvements will take in your area will depend on where you live. Canada is huge, and its communities are hugely diverse, with diverse needs. Keep an eye out for local projects — they’re a small part of something much bigger.

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