Last week’s post, “U.S. Home Sellers Experience Greatest Price Gains Since 2007,” introduced how the housing market’s recent price gains may benefit home sellers and buyers throughout the nation in months to come. Home sales have ultimately rebounded from the housing market crash; however, these current price gains have lately had a completely different effect on the housing rental industry.
According to National Mortgage Professional Magazine, the nation’s median rent prices have increased nearly 2.8 percent in the past year. Today, the average cost of a two-bedroom apartment is $1,300, while the rate of a one-bedroom is approximately $1,140. Although this increase in rental fees has benefitted leasers in many U.S. locations, these significantly higher prices have made the cost-of-living for renters nearly unlivable.
Since the latest increase in rent prices, as many as 30 million Americans have been forced to spend more than 30 percent of their pre-tax income on rental fees, which includes utilities. The advocacy group Make Room reported that this is a 22 percent increase from 2005, when 16.4 million workers paid 30 percent of their income on rent.
Buyers should therefore consider ways to save and invest in property as opposed to paying high rental rates. With low interest rates, homebuyers can get a lot of bang for their buck by investing in a long-term, appreciating asset. Our home mortgage specialists are available to help, whether you have questions about the housing market, the right steps to take before a purchase, or anything related to the home-buying process in general.