Posted on 02/24/2015 10:47:21 AM PST by SeekAndFind
A new report from Zillow shows that rents across the U.S. are increasing, and not just in the expected regions of New York City, San Francisco and Boston. Overall, rents increased 3.3% year-over-year as of January. But many cities outpaced that, including Kansas City, which saw rent grow more than double the national average, jumping 8.5% year-over-year. St. Louis saw rent increase by 4.5% over the same period. Rents in Detroit grew by 5.0% and rents in Cleveland grew by 4.2%.
Nationwide, rental appreciation is still below its peak - 6.3% hit in September 2012 after the housing bust. According to Zillow, monthly rents have grown at roughly twice the pace of wages in the U.S. since 2000. That means Americans are having to spend a greater share of their income on rent - about 30%, versus 25% in the past. And this problem isn't likely to go away anytime soon. Zillow surveyed a number of economists and real estate experts who all said they expected rental affordability to continue to "deteriorate for the next two years."
That will likely impact you even if you're a homeowner, since renting affordability issues tend to impact the broader housing market. Instead of becoming a stepping stone to homeownership, renting has become a barrier. Zillow CEO Spencer Rascoff explained the rental market following the housing crisis: "All of a sudden, there were 5 million new renters and the rental stock didn't increase."
That drove rental prices up; meanwhile, home prices were busy declining. "When home values came way down and the housing crisis emerged, we went from a homeownership rate of around 69% to 63%," Rascoff said. Since the crisis, home prices have crept back up: The most recent data shows the median price of existing homes sold in January was $215,000,
(Excerpt) Read more at finance.yahoo.com ...
Here are the metro areas that had the largest year-over-year price jumps.
10. Detroit
Median rent, January 2015: $1,096
Increase since January 2014: 5%
9. Phoenix
Median rent: $1,225
Increase: 5.3%
8. Houston
Median rent: $1,497
Increase: 5.9%
7. Charlotte, N.C.
Median rent: $1,235
Increase: 6.1%
6. Austin, Texas
Median rent: $1,657
Increase: 7%
5. Portland, Ore.
Median rent: $1,587
Increase: 7.2%
4. Kansas City, Mo.
Median rent: $1,214
Increase: 8.5%
3. Denver
Median rent: $1,827
Increase: 10.2%
2. San Jose, Calif.
Median rent: $3,190
Increase: 13.4%
1. San Francisco
Median rent: $3,055
Increase: 14.9%
Only two of the 36 markets listed in Zillow’s index had drops in median rent: Minneapolis-St. Paul (down 0.3%) and Chicago (down 0.5%), though both cities still have above-average median rents, at $1,502 and $1,609, respectively.
While New York and Los Angeles didn’t have top-10 increases in their median rents, the first- and second-largest cities in the U.S. still have some of the highest housing costs. L.A.’s median rent increased 4.9% from 2014 to $2,460 (third highest), and New York/Northern New Jersey came in at No. 4 with a median rent of $2,331.
When the middle class is destroyed, rents will go up. Law of supply and demand.
Coming soon: renter’s “mortgages”?
Everybody's got AIDS!
These trends in rent increases - along with all past historical trends prove one constant.
Better to own than rent.
RE: When the middle class is destroyed, rents will go up.
How does that follow?
If rent prices are high, who can afford them if the middle class is destroyed?
Or, they could be halved. That's what happened to Cuba, circa 1959.
Two or more families will rent a house together. This already is happening in Los Angeles, and wherever rents are inordinately high.
They pay next to NOTHING in Cuba. A doctor makes far less than our minimum wage.
After years of rents being depressed, due to the perennially sh*tty economy, they jumped substantially here in Pittsburgh over the last couple of years after fracking + high-tech shook the local economy out of decades of rigor-mortis.
San Jose rentals don’t seem to be slowing down either.
Unless you are lucky enough to own a house, you are essentially working to pay the rent on a 1br apt.
Stock options are gone in SV so you can’t buy anything.
I was SHOCKED how bad it was last summer.
Yup. Destroy the middle class, make them all renters, and you’ll have an electorate voting to pass rent control faster than you can say Fake White Indian.
Which will spur people into buying houses, which will leave a lot of vacancies in the rental market, which will drop rental prices, etc etc. He found a long existing easily traced cycle, I’m sure he’s very proud.
Just another Bass Ackwards way of saying that the Obama Inflation is getting ready to kick into high gear.
It always does, when home ownership drops. We are at an ownership low, so rent will increase.
“So how is it that someone can afford an apartment at $3K a month, but not a $3K a month mortgage?”
I’s often a lifestyle choice.
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