Is Income Keeping Up With Rent Growth?
Digested from “Income and Rents: It Takes Money to Make Money”
Property Management Insider (3/19/15) Wegman, David
In most metro areas, the increase in personal income after the Great Recession has been followed by three consecutive years of declining income growth, according to an analysis by David Wegman of MPF Research. Unless wage growth increases, rent growth will stagnate.
According to data from the U.S. Department of Commerce’s Bureau of Economic Analysis, areas that saw high rent growth from 2009 to 2013 generally aligned with the areas that had strong income growth. This is particularly true in cities — such as San Jose, San Francisco, Austin and Boston — that have a high concentration of technology and biotechnology jobs.
However, if projections for increased job creation, rising asset values and higher interest rates come true, personal incomes should begin to rise soon.