The Myth of Rising Rents
Digested from Bloomberg
On a national basis, incomes appear to be keeping up with rents.
For few years now, the narrative has been that rents were rising faster than most people could afford in most metros around the country.
But Bloomberg’s Patrick Clark says that may not be the case for some residents.
Citing information from Greg Willett on the 5.7 million leases in RealPage’s database, Clark says that the median rent-to-income ratio has held steady at around 23 percent since 2010.
“It’s not that the rents didn’t increase—they did—but that landlords were able to find plenty of renters able to keep up,” Clark writes. “The median income for the renters in Willett’s data was $45,000 in 2010 and $61,000 last year, a 36-percent increase.”
Clark writes that the median income for market-rate apartments in buildings with at least five units is about $32,000, according to an analysis of census data conducted by Andrew Jakabovics, Vice President of Policy Development at Enterprise Community Partners. Willett’s data doesn’t include student or senior housing, which the Census Bureau does not report on.
Since 2010, household incomes have increased by 9 percent. Additionally, apartment owners have been successful in renting to the more affluent, such as Baby Boomers or Millennials advancing in their careers.
Still, there are Americans who are struggling to make ends meet with one in three U.S. households earning less than $30,000 a year, according to Willett.