Why is The Rent so Darn High?
Picture this: It’s the end of the month and you (hesitantly) pull out your checkbook to write your rent check.
You (woefully) write out the amount you owe to your grumpy and unreasonable landlord.
You (seriously) consider packing a bag and skipping town … staying at a motel may be cheaper at this point.
You (tentatively) sign the check and stick it in the mailbox with a heavy sigh.
Nightmares of a bank account reading $0.00 haunt your sleep until your next paycheck.
If you are a renter, you may recognize this scenario instantly.
If you are a homeowner, consider yourself lucky.
It is a buyer’s market out there, and with properties being snatched up quicker than flies by a frog, many U.S. citizens don’t have much choice than to spend a good chunk of change on a rental.
While big cities like LA and New York City are notorious for their expensive rent rates, smaller cities are seeing a huge increase in rent prices.
Some cities with the highest percent change in annual rent rates include San Francisco (14.9% increase since last year), San Jose (13.4%), Denver (10.2%), Kansas City (8.5%), and Portland (7.2%) according to Forbes.
In fact. Stan Humphries, the Chief Economist at Zillow, states that “Since 2000, rents have grown roughly twice as fast as wages … and rental appreciation has been a freight train … chugging along without any appreciable slowdown.”
So, why is this happening?
The main cause to this issue is a shortage of available rentals.
According to CNN, vacancy rates are extremely low, allowing landlords to boost up rent prices.
Because Millennials are renting for longer periods of time and Baby Boomers are downsizing, vacancies are tight – and if people continue to pay these high rent rates, they will just keep increasing.
Additionally, the housing market just can’t keep up with demand, making rentals the only choice for many people.
Unfortunately, you probably won’t see a drop in your rent price any time soon, so hang in there.