Hey, why is rent so high in the US anyway?
If you live in America and you are a renter, you’ve probably noticed a trend. Rent is really, really expensive, and it doesn’t seem to be getting any better. What is causing this trend and where does it end?
Supply And Demand Are Not Our Friends
Many consumers complain about rent being high, but that hasn’t stopped anyone from renting yet. Even if rent is completely unaffordable, we all still need a place to live. So we do what we have to do, whether that means getting a second job or finding a roommate.
In many markets across America, there are more people looking for homes to rent than there are homes available. Landlords are able to keep increasing prices and renters are still renting. In fact, rental prices are increasing every month and every year at a higher and higher rate.
We Can’t Blame Inflation
Inflation seems to take the blame for all expensive prices, but inflation is not guilty in this case. Rent is increasing faster than inflation.
According to many estimates, if rent and inflation were increasing at the same rate, average rental prices would be almost $200 cheaper each month.
We Just Don’t Make Enough
According to a study from Time Magazine, to afford a basic two-bedroom home, a person needs to make $21.21 an hour and work full time. The same study found that the average tenant in America only makes $16.38 an hour. Hence, most renters are already $5 per hour outside of the range of their rent actually being affordable.
Each person’s financial situation is different, but, if increasing rent has you in a chokehold, why not talk to a lender about a mortgage? In some cases, monthly mortgage payments are cheaper and more predictable than rent.