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Accelerating Housing Costs Has Renters Feeling the Squeeze

The gap between rental costs and household income is widening to unsustainable levels in many parts of the country, and the situation could worsen unless new home construction meaningfully rises according to new research by the National Association of Realtors®. In the past five years, a typical rent rose 15% while the income of renters grew by only 11%.

NAR’s research analyzed changes on income growth, housing costs and changes in the share of renter and owner-occupied households over the past five years in 70 metropolitan statistical areas across the U.S.

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The top markets where renters have seen the highest increase in rents since 2009 are:

- New York, NY-NJ-PA,

- San Jose, CA,

- San Francisco, CA,

- Denver, CO,

- Seattle, WA.

 

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A way to relieve housing costs is to increase the supply of new home construction – particularly to entry-level buyers. Builders have been hesitant since the recession to add supply because of rising construction costs, limited access to credit from local lenders and concerns about the re-emergence of younger buyers. It is estimated housing starts need to rise to 1.5 million, which is the historical average.

 

Squeeze on Renters  

 

Comments
  1. Rents are up because cost of materials for repairs are up. Paint costs have trippled in last few years. Flooring costs are up. Tenants are demanding properties be in pristine condition – like the model homes they tour on Sunday afternoons. Tenants do not care for properties like they did 10 or 20 years ago. Property Taxes in Florida have gone up – about double of what they were 10 years ago and the insurance rates have tripled or more. Lawn care is up, due to higher fuel prices; repair calls have gone from a basic $45 to a minimum of $75.

  2. Jose

    Wow….News about the Rental Market, I thought that nobody cares about rentals……Thank you Nadia!