The gap between rental costs and household income is widening to unsustainable
levels in many parts of the country, and the situation could worsen unless new home
construction meaningfully rises, according to new research by the
National Association of REALTORS®.
NAR reviewed data on income growth, housing costs and changes in the share of
renter and owner-occupied households over the past five years in metropolitan
statistical areas across the U.S.. The findings reveal that renters are being
squeezed in many metro areas throughout the country due to the disproportionate
growth in rental costs to incomes. New York, Seattle, and San Jose are among
the cities where combined rent growth is far exceeding wages.
Lawrence Yun, NAR chief economist, says the disparity between rent and income
growth has widened to unhealthy levels and is making it harder for renters to
become homeowners.”In the past 5 years, a typical rent rose 15 percent while
the income of renters grew by only 11 percent. The gap has worsened in many
areas as rents comtinue to climb and the accelerated pace of hiring has yet
to give workers a meaningful bump in pay.”