Multifamily Report: Rent Prices Growing Faster Than Income
Rents are surging at a record pace, outgrowing not just salaries, but inflation as well, a CoStar multifamily report reveals. "Across most markets, renters are paying a higher percentage of their incomes in rent," CoStar director of multifamily research Luis Mejia says. In market rate neighborhoods, renters pay an average of $1.2k/month, around 17% of income, though the average salary—despite trailing behind—remains pretty high at $85K/year (which often comes from two or more salaries). With a shortage of options, these households pay the rent, even though it eats a big portion of their paychecks.
"Bottom line is people need to live somewhere, so they will pay the higher rent and make it work in terms of budget," NeighborWorks (an affordable housing organization) spokesman Douglas Robinson says. "Rents will continue to grow faster than wages and inflation." On the more grim side, about 30% of Americans earn $30k or less a year, nearly half of the average rent and far beyond the rent-burden threshold. These low-income families are most likely in single-family homes and commute into the city. Reis predicts rents to increase by 3.8% over the course of this year. [NREI]
