25 Eye-Opening Facts About Rising Rent Costs That Will Shock You

Many people rent and are deeply impacted by the changes and increases in rental costs. While renting a home may have many benefits, especially for those who cannot buy one, one of the main drawbacks of renting is rising rent costs. Here are 25 eye-opening facts about rising rent costs that will shock you:

Rent Prices Rise Faster Than Wages

Rent prices continue to outgrow wages significantly. This has been an ongoing trend over the last couple of decades, which impacts many renters who continue to pay higher rent while their income remains stagnant. Some cities in the US have even experienced rent costs doubling over time while their wages see very slow growth.

Many Renters Spend Over 30% of Their Income on Rent

Many renters who live in more expensive cities spend over 30% of their monthly income on rent. Many financial experts deem this to be cost-burdened, as it leaves little left to cover necessary items and contribute to a savings fund. As rent prices continue to rise, more and more Americans may find themselves in this situation, which has the potential to cause a range of financial issues.

Rent Prices Have Doubled in Some Cities

In major cities like San Francisco, New York, and Los Angeles, rent prices have doubled in the last twenty years. This has been driven by the high demand for housing and rentals in these cities owing to the large influx of new residents moving to the cities for the opportunities they provide. This indiscriminate rise in rent has made it very difficult for low-income and middle-income families to keep up with rental costs in the city, leading many of them to relocate further from urban parts of the cities.

The Pandemic Caused Rent Prices to Drop

The pandemic saw many changes in the way people preferred to live. There was a trend where urban dwellers preferred to live away from these areas, especially with the increase in remote work. This caused rent prices to decrease during the pandemic. However, the post-pandemic recovery has seen people moving back to urban areas, leading rent prices to continue increasing and surpassing pre-pandemic costs.

Some Cities Have Experienced Over 50% Increase in Five Years

Driven by economic growth, cities like Phoenix and Austin have experienced a significant increase in rent prices, with some areas in the city seeing over 50% increase in just the last five years. The influx of new residents to these cities has played an essential role in the increase in demand for rentals, leading to a sharp rise in costs.

There is a Shortage of Affordable Rental Housing in the Country

The US offers a range of programs for its low-income earners, providing them with affordable rental housing in various areas nationwide. However, the high demand for affordable housing has led to a shortage of rental housing with a large deficit for extremely low-income earners in the country, causing a rental crisis for many. These earners also cannot afford to rent out other areas because of the high costs, leading to various issues.

Rent is Less Affordable for Young People

Many Millennials and Gen Z renters are facing issues with finding affordable rental units that meet their living requirements. The various amounts of debt these people carry in terms of student debt and low and stagnant wages, combined with the lack of affordable housing options in good neighborhoods, have left these individuals struggling.

Renters Are More Likely to Experience Homelessness

The high increase in rental costs is likely to increase the possibility of renters experiencing homelessness. Many renters live paycheck to paycheck each month, which means that if the rental prices become too high, they might be at higher risk of not being able to afford to keep up with the rising prices even in their own homes, potentially leading them to become homeless.

Many Renters Face Housing Insecurity

Many renters in America face issues of housing insecurity because they fear not being able to keep up with the rising costs of rent. These individuals deal with housing insecurities that come in the form of eviction risks, overcrowded living conditions, the inability to pay rent on time, and much more.

Rental Costs Are Increasing in the Suburbs

Many renters living in urban hubs pay much higher rent than in other places in the country. This has led to a shift in living preferences among some individuals who want to lower their rental costs and, therefore, move to suburban areas where rentals are much more affordable than in the city. However, this shift has led to an increase in demand for housing in the suburbs, which has increased rental costs even in these areas.

Many Families Face Financial Burdens because of Rent

Many families living in rental units have more financial burdens than those living in their homes. Renting units with two bedrooms or more in many cities often surpasses the national average for what middle-income earners can afford. It can be challenging for parents to cover all expenses for the whole family while keeping up with the rising rent costs, often leading to poor financial management and little to no savings.

Race Affects Rent

A concerning trend in renting in the US is that renters of color tend to be more disproportionately affected than others, especially by issues that emerge from rising rental costs. This highlights existing wealth gaps and other issues in the country that leave these individuals much more heavily impacted and with more challenges than other residents. More renters of color are likely to be more affected by the rising trends in rental costs in the country.

Rent Prices Can Vary Within the Same City

Rent prices are different throughout a city. Areas with higher demands because of their proximity to amenities or the infrastructure and facilities available in the areas have rental units that are much more expensive than units in neighborhoods that do not offer all these benefits. This can also create a disparity among different neighborhoods in the city, where some areas have much better amenities than others.

Real Estate Investors are Driving Rent Increases

Real estate has helped grow people’s wealth over time. Institutional investors and large real estate firms that invest in residential properties can set their rental prices. Sometimes, these prices can be exceptionally high as investors look to maximize their investment returns. This, in turn, can significantly impact the rental market and drive up rental costs for different properties in the area.

Short-term Rentals Impact Rental Costs

There is an emerging trend of increasing demand for short-term rentals in different parts of the country. Various platforms that offer these kinds of rentals contribute to the increase in rental costs, as landlords may decide to rent out their properties for much higher costs for a shorter duration rather than offer long-term leases to renters. Not only do these rentals contribute to rising rental costs, but they can also influence the availability of affordable rentals in the area.

Renters are Forced to Move More Regularly

Renters are more likely to have to move much more regularly from one unit to another, even within the same city, at the end of their lease or when rental costs increase out of their price range. This can be disruptive for renters and add to their expenses, including relocation costs, hiring movers if necessary, making deposits, etc. This is why many people prefer to live in their homes for long-term housing security.

Renting is Becoming More Permanent

While many look to become homeowners, long-term renting or even renting throughout their lifetime is much more likely, especially with the exceptionally high housing costs that continue to increase. Renters are finding it more difficult to become homeowners because of the housing market conditions, leaving them to deal with rental payments that will continue increasing over time.

Renting is Becoming More Expensive than Homeownership

When considering the long-term costs of renting versus owning a home, renting may be more expensive because of increases over time. While homeownership may likely be less expensive over time, meeting the current costs of the market to become a homebuyer is also very expensive and requires years’ worth of savings in addition to home loans and mortgages.

Vacancy Rates are Low

Low vacancy rates are a significant issue in the rental market that has driven rental costs to skyrocket in many areas throughout the country. The national vacancy rates have hit record lows, which has increased pressure on renters and pushed costs to continue rising. Renters face a range of issues rooted in the limited availability of rental options and the continually rising prices, especially in cities where the demand for rent is continually increasing with the increasing population.

Rental Costs Force Renters to Lower Expenses

The rising trend in rental costs has led many renters to reduce spending even on essential amenities and facilities to keep up with the rising prices. Many renters lower spending on food, healthcare, and transportation, which can lead to many management issues and can even lower the overall quality of life. Many renters have had to cut down spending on items that improve their comfort, contributing to the increased stress that people face on top of financial stress.

Rental Prices in Rural Areas Have Increased

With remote work trends emerging, many remote workers are leaving urban living because of the high costs of living and housing, which drive up monthly expenses. These professionals are increasingly moving to more rural areas that offer modern amenities and high-speed internet, which enable them to continue their professional tasks. However, this increase in population in rural areas has led to an increase in demand for rentals and housing, leading to an increase in rental prices.

Rental Costs Impact Mental Health

The financial stress that the rising rental costs cause on renters has led to a decline in mental health for many renters. These individuals have a range of stressors that go beyond meeting rental costs each month and include fear of eviction, displacement, and even homelessness, which can significantly impact mental health. These issues have increased anxiety and depression for many renters, leading to a concern for the mental health of many renters.

An increase in Rental Costs Can Become Political

Increasing rental costs continue to impact millions of residents nationwide, potentially becoming a major political issue. Voters are increasing their demand for proper rent control policies and affordable housing, which will ensure regulated rental price increases and reduce the risk of homelessness among renters. If these issues continue to grow, voters and renters may increase their demands, leading to major political issues.

Rent Price Increases Are A Global Issue

Many major cities worldwide are dealing with the indiscriminate increase in rental costs. These cities include London, Paris, Sydney, and Vancouver, where renters are having to deal with high increases in rental costs that are increasing at faster rates than inflation. These increases have put pressure on renters from all over the world, demonstrating a global problem rather than a problem only faced by American renters.

Rent Prices Are Expected to Continue Rising

Renters may be disheartened to learn that many financial experts predict that rent prices will continue to increase, especially with housing supply shortages, inflation, and the increasing number of real estate investors. Cities experiencing rapid economic growth are likely to see the highest increase in rental costs in the next few years as the population and demand for housing increase. This highlights the need for renters to prioritize saving to ensure that they can keep up with the rising rental price increases.

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