Rents are up more than 20% in these cities
Homeownership for the second quarter of 2015 just hit its lowest level in 48 years... Just 63.4% of the U.S. population own homes.
So it’s no surprise that rental fees are growing at two times the pace of income on the heels of income growth, stronger demand and a great lack of supply, as we noted here. In fact, Americans paid $20.6 billion more on rental properties in 2014 above 2013.
And there are still no signs of slowing growth, creating quite an opportunity for rental property owners and smart investors. And let’s face it. Millions of Americans are far more likely to rent than own these days.
It’s why – in some cities – rents are surging more than 20%, according to Market Watch.
In San Francisco, rents rocketed 14% to $3,530 year over year for a one-bedroom apartment. Rents were up more than 5% to $3,160 for a one-bedroom in New York.
“But while these major metropolitan centers are well-known to be the most expensive in the country,” notes Market Watch, “the monthly rent for one-bedroom apartments has jumped by double-digit percentages in cities that don’t typically fall under the media’s spotlight when it comes to rental prices, including Oakland, Calif. (up 23% year over year to $2,030), Sacramento, Calif. (up 21% to $970) and Jacksonville, Fla. (up 16% to $870), Kansas City, Mo. (up 15% to $770), Fresno, Calif. (up nearly 17% to $770), Austin, Texas (up 12% to $1,120) Denver (up 11% to $1,280), Atlanta (up nearly 11% to $1,250) and Charlotte, N.C. (also up 11% to $980 per month).”
Nationwide, renters can expect to spend more than 30% of their income of rent thanks to supply constraints and higher demand. And, unfortunately for many, rents are becoming wildly unaffordable on a historical basis.
The trend of rising rents could continue for the next 15 years, according to a report from the Urban Institute, as well, with a likely drop in homeownership to 61.3% by 2030.
It’ll be tough for renters going forward. Hopefully, there will be some relief.
But if you’re a renter, you stand to make a fortune.