High cost of housing leaves some Bay Staters stuck as renters

Page 2 of 2 -- ''The pendulum is probably more in favor of renting," especially for people who don't plan to live in Boston long term, Nechayev said.

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Overall rental vacancies in the Boston area have remained flat at between 5 percent and 6 percent for about two years, said Biria St. John, a vice president at CB Richard Ellis, the real estate brokerage. Still, he said, there is evidence that more people are renting than in years past, because landlords are offering fewer incentives such as several months of free rent.

''A year ago, you saw concessions peak," he said. ''The folks who are renting now aren't going to be persuaded to jump into homeownership anytime soon."

It also means that old notions of affordability have been turned on their heads.

Mortgage bankers used to calculate how much home one could afford by multiplying his income by three; for example, for a family with an income of $100,000, any mortgage above $300,000 was considered out of reach.

But in the Boston area, with little housing stock available below $350,000, that old formula is fast growing outdated, pushed aside by the popularity of nontraditional mortgages, high housing prices, and zealous mortgage brokers, said Thomas R. Gleason, executive director of MassHousing, the state's quasipublic mortgage lender.

MassHousing used to consider 28 percent of a buyer's income as a rule of thumb for how much of a monthly payment he could afford. These days, that ratio has crept up to about 33 percent.

''The point of not spending more than one-third of your income on housing is a good one to focus on because that will give you a number that you can afford," Gleason said.

Many people have also turned to adjustable-rate mortgages, which offer lower interest rates and monthly payments for an introductory period, usually one to five years.

About half of the clients at mortgage broker Summit Mortgage in the South End used adjustable-rate loans to buy their homes last year, up from about 35 percent five years ago and 25 percent a decade ago, said Rick Fedele, the agency's president.

Fedele said the change has come about because more homebuyers are comfortable with nontraditional mortgages than in years past, not because homes in Boston are unaffordable.

Still, the cost of buying in Boston has both sobered and fostered resentment among locals who are disappointed that their middle-class salaries can't help them open the door to a home of their own.

Neil Okonak, 26, moved to Newton from Pittsburgh in 2003 for a $45,000 per-year job as a technology consultant, trading in a two-bedroom apartment he rented for $535 for one bedroom in an apartment he shares with three roommates. His share of the rent: $550.

Now Okonak watches wistfully as old friends become homeowners in Pittsburgh while his share of the rent costs more than their mortgages.

''Planning for the long term means planning for a move," he said.

Not everyone plans to move away, but frustration reigns even among those who have lived here for decades.

''You had your college apartment, and here I am at 40, and I still have a college apartment," said John McLachlan, a computer programmer who rents a 700-square-foot, one-bedroom apartment in the South End for $1,650 a month.

After living in Boston for 22 years, McLachlan started poking round Dorchester last year for a condo he could afford on his $83,000 salary. What he found was ''a lot of expensive garbage where the landlord just threw in some stuff from Home Depot and wanted to sell it for $300,000 or $400,000."

Even if he'd found digs suited to his tastes, McLachlan said it wasn't likely to be in his price range.

''The standard mortgage is triple your income, which for me is about $250,000. Here, that's butkus," he said.

Keith Reed can be reached at reed@globe.com.