Rentals saw a 4.6 percent increase last year, the biggest leap since the recession in the U.S. Renting has benefitted the landlords but not the renters as apartment rents soared high since 2007.
According to Realtor, the average rental now starts at about $1,180. A report from a Dallas-based apartment research company, Axiometrics Inc., revealed that renting fee had increased by 4.7 percent in the last quarter compared with the same period the previous year. Renting has become more expensive because of the shortage of apartments for middle-income renters.
CNN reports that rentals will increase faster than the inflation rate. Experts predict about 3 percent to 5 percent increase in the U.S. After the recession, the vacancy rates dropped, with more people wanting to rent. This trend will make renting more unreasonable this year until next year. It is also expected that rent in the hottest rental markets including New York, Boston and San Francisco will slowly go down.
"We are already in a rental affordability crisis, and 2016 won't let up," said Svenja Gudell, chief economist at Zillow.
Devin O'Brien, head of strategic marketing at rental platform Zumper, claimed that as the prices of apartments in the key cities go down, rents will get higher in its nearby areas. This means that rents in Austin, Dallas, Houston, Miami, Oakland and Cambridge will soon get high as renters look for more affordable places to stay. Meanwhile, for this year, it was said that half of the renters will find it hard to pay their rents.
Experts advise renters to maintain their housing expense at about 30 percent of their monthly income. Harvard's Joint Center for Housing Studies say that renters who spend more than 30 percent on rents have increased to 21.3 million since last year. Another reason why renting becomes more expensive is because rents have increased tremendously than the renter's income.
"These trends have led to record numbers of renters paying excessive amounts of income for housing, with little prospect for meaningful improvement," the report said. "The median rent for a new apartment climbed to $1,372 last year, a 26% increase from 2012."