Since the pandemic started, average American wages have increased, but for many, these gains are being eaten up by growing rent. (Photo : by Drew Angerer/Getty Images)
Average American wages have increased during the pandemic, but the growth is outpaced by rising rent prices, according to a survey by Zillow and StreetEasy. Nationally, rents surged by 30.4% between 2019 and 2023, while salaries only rose by 20.2% over the same period, with major cities like Atlanta, Charlotte, Miami, Phoenix, and Tampa experiencing the largest disparities.
Renters in cities such as Baltimore, Cincinnati, Las Vegas, New York, and San Diego are also facing financial challenges due to escalating rent prices, which soared as demand surged during the pandemic, especially as people sought more spacious accommodations in suburban and rural areas.
While some cities like New York witness rent hikes, others like Austin, Texas, and Portland, Oregon, have seen rent decreases.
According to a recent survey by online real estate brokers Zillow and StreetEasy, between 2019 and 2023, rents increased 30.4% countrywide, while salaries increased 20.2% over the same period. The largest disparity between rent increases and salary growth was observed in major cities such as Atlanta, Charlotte, North Carolina, Miami, Phoenix, and Tampa.
Renters are also having financial difficulties in Baltimore, Cincinnati, Las Vegas, New York, and San Diego, among other locations.
During the pandemic, rent skyrocketed as demand increased as Americans fled large cities and chose to live in more space away from neighbors in the suburbs and rural areas. Housing experts claim that rent is still rising, although it is more slowly.
In sharp contrast to more populous cities like New York, certain metros, like Austin, Texas, and Portland, Oregon, have witnessed drops in rent in the past year, according to the data.
According to Rent.com, the median rent in the United States increased to $1,987 in March, a 0.8% increase over the previous year. Zillow's data indicates that millennials and Gen Z individuals who have been priced out of the property market are a contributing factor in the rise in rent.
An April Bankrate report showed many Americans still choose to rent since it's less expensive than buying a house in major American cities.
Rent Outpacing Salary Growth
Due to rent exceeding salary growth, a growing number of Americans are living on a smaller amount of their income and frequently forgoing other essentials like food, child care, or saving for a down payment on a home.
Millions of Americans are now compelled to pay more than the advised 30% of their monthly income on housing due to rising rent, which has contributed to the national homelessness crisis. The most recent figures on the consumer price index show that rent hikes have also been a key factor in keeping inflation from declining.
For the time being, Fed Chair Jerome Powell is quite troubled by the affordability issue in the housing market, despite his continued optimism that rents will eventually decline.
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