The Rental Crisis: Prep for Sticker Shock
“We are in the midst of the worst rental affordability crisis that this country has known.” That’s what Shaun Donovan, U.S. Secretary of Housing and Urban Development noted in December 2013.
Rising rent with stunted wage growth and little demand created an affordability problem, noted a study at the time.
“Over four years, [there’s been] a 43 percent increase in the number of Americans with worst-case housing needs,” said Donovan. “They’re paying more than half of every dollar they earn from housing.”
That was close to two years ago.
And very few paid much attention to the warning.
Nowadays, even as part of the U.S. have seen a 20% rise in rents…
That’s not the worst of it.
Incomes are not keeping pace of rent increases.
Amid stronger demand, and a great lack of supply, the number of U.S. households that spend half their income on rent could rise another 25% to 14.8 million over the next 10 years.
Worse, that bleak report follows news that U.S. homeownership just hit its lowest point in 48 years… and unless something is done – and fast – rents across the country could skyrocket.
It’s great news for property owners, but for the folks that rent not so much. In fact, as median rents climb faster than the pace of income and inflation, groups like Blackstone Group and Starwood Waypoint Residential are making great money.
Here’s more on the crisis from new research by Harvard University’s Joint Center for Housing Studies and Enterprise Community Partners.
Unfortunately, it’ll get worse before it gets better.
Perhaps now, some one will pay better attention?