Sunday, December 15, 2013
Apartment Renters Can Expect Their Rent To Increase By More Than 3% In 2014
In 1960, about 62.1 percent of Americans owned their own home. Since 1960, the home ownership rate in the U.S. has only increased by about 5.6 percent, which means there is a large percent of the population that is renting. Affordability is a major reason for some to continue renting, but that may be changing as rents are expected to rise 3.1 percent nationally in 2014.
The reason stems from economics
The recession resulted in a slowdown on home construction, and low supply with high demand will drive prices up. In addition, due to the number of foreclosures, the number of renters grew from 31 percent in 2004 to 35 percent in 2012. Not only are the number of renters increasing, but the amount they are paying in rent has also increased every year since 2010.
The increases will vary by city
In cities such as Austin and Washington, D.C. where building of rental units has been aggressive, rents will not increase as much or at all, or could even decrease due to the abundance of apartments available. But for most other parts of the country, renters will have to brace themselves for rent increases.
In San Francisco, for example, rents rose 8 percent in 2013 and a total of 43 percent since 2009. San Francisco's rent increase is expected to be about 5.1 percent next year. You may pay as much as $1,200 for a room in San Francisco, compared to an entire house for the same amount of money in Salt Lake City. This scenario is occurring across the country. The result is that more than half of all U.S. renters will end up paying beyond the affordability level determined by HUD, which is 30 percent of income.