The rental prices in the US have been slowly increasing since October and have already outgrew the rate in increase of employee's income in the country. Data gathered from studies revealed a 4.5 percent increase in rental rates from 2014. Income growth, on the other hand, rose just 2.5 percent compared with last year.
CNBC revealed that despite the slow growth in rental rates in the US, income growth is still having a hard time catching up with its 2.5 percent increase compared with the 4.5 percent increase in rental rates in 2015. Commodities, on the other hand, have increased by 5.3 percent in September and 6.2 percent in August.
With an average family income of 53,657, the median rental payment of $1,382, based on data gathered in October, is still burdensome for the average US household. Although younger renters are tend to rent properties in areas in the Metro such as San Francisco, San Jose, Denver, and Oregon, the price increase in rents have already surpassed the capacity of apartment renters to pay. The slow increase in rental rates recorded last October is presumed to be a test on how renters can really carry the burden of the upsurge.
According to Yahoo News Singapore, majority of the renters in the United States are already 40 years old. This is a remarkable reflection of the effect of the recession to the aging population of the country. Thus, this report overturns others that say that the new generation of Millenials is the one taking up most of the percentage of renters in the housing industry. Despite the rash effect of the rental rates increase on the average American household, new rental properties are being built, which are aimed to penetrate the 6-digit-earning tenants market.
With millions affected by the foreclosure during the Great Recession, it is not a surprise to see more families renting instead of buying properties. However, with the continuous increase in rental prices in the US, the average 30 percent of household income allocated for housing might grow higher in the next months to come.
