Rent Growth Outstrips Wages in Most U.S. Metros, New Report Shows
This article was first published on NerdWallet.com.
If you rent your home in a major metro area, chances are you already know this hard truth: Your pay raises aren’t keeping up with your rent hikes.
A new analysis released on Tuesday by the rental website StreetEasy and its parent company Zillow found that rent growth has surpassed wage growth in 44 out of the 50 largest U.S. metros since before the pandemic. The report analyzed rental data from both company sites as well as wage growth data from the Bureau of Labor Statistics.
What’s driving rent price growth? Nicole Bachaud, senior economist at Zillow, chalks it up to a combination of low inventory of homes for purchase, high costs of homeownership and few rentals available all putting pressure on the rental market. And it’s not just high prices keeping people in their rental homes — mortgage rates are also elevated, which increases the cost of buying a home.
“When we look at why we have so many renters and so much demand for rentals right now, it's not for lack of people wanting to buy homes — it's for the lack of ability to be able to buy homes,” says Bachaud. “There are no homes available to buy and the ones that are available are oftentimes unaffordable for the majority...