Rent costs in the United States have hit a record high, says CBS Chicago, citing data from Yardi Matrix. Research figures attest that the current national median rent cost in America sits at $1,405 as of June, 2018. This showed an increase of 2.9 percent for year-over-year growth, and what estimates to being a $12 month-over-month steady rise as well. What’s even more significant is that while rent costs and housing prices in the U.S. are on an upward trend, said increase is happening at twice the speed of inflation and pay, cites CNBC. Average annual earning growth for an American remains below 3 percent for the past few years.
Reuters polls suggest that an acute shortage of affordable homes in America will only continue to happen over the coming years, if the majority of property market analysts being polled are correct. This data is not only dealing with rent cost findings, in fact, since the financial crisis and deep recession, U.S. housing prices have regained loses, fueling a pickup in economic activity and housing demand all while being unable to provide the supply and rising demand, which has, in effect, caused home-ownership to be even less affordable.
It’s forecast that U.S. house prices will rise 4.3 percent in 2019 and another 3.6 percent in 2020, potentially challenging would be middle and lower earning Americans’ dream of home-ownership even more if wages remain stagnant, says CNBC. Sal Guatieri, a senior economist at BMO Financial Group, spoke with reporters, stating that prices are indeed “outrunning family incomes.”
“We are not seeing a temporary phenomenon. House prices have been outrunning family incomes for several years in the U.S. and while demand has cooled off a bit, the supply side is still very tight. I think house prices will continue to outrun family incomes for at least another year and it will take some time for demand to slow and to some extent supply to increase.”
Meanwhile, the U.S. Department of Housing and Urban Development (HUD) is setting forth a proposal to raise rents on families and individuals of lower income, which advocates strongly believe could increase homelessness, reports NBC News. HUD, more commonly known by some as the public housing authority, claims to help families secure affordable housing by administering Federal aid to local housing agencies (HAs) that manage the housing for low-income residents at rents which can be afforded.
In fact, HUD is a member of the United States Interagency Council on Homelessness (USICH), a creation that came about to help communities deal with homelessness in July, 1987, after the Stewart B. McKinney Homeless Assistance Act. Courtney Hall, Housing Up’s vice president of programs, spoke out on what could possibly happen if HUD raises rent costs.
“If folks can’t afford to make up the difference, we are going to see an increase in those who are homeless. These families are already teetering. They’re not just splurging and spending money — they’re doing what they can to make ends meet.”
If you have been pondering whether rent is pricer than ever, turns out that data backs up such assumptions. Yardi Matrix says that the 20 biggest increases in rent happened in smaller cities, “where population migration and the strengthening economy are accelerating rent growth.” The top three most expensive cities for renting in the U.S. are currently Manattan at $4,116 per month, San Francisco at $3,561, and Boston at $3,374. Ranking in at the lowest three are Wichita at an average rent of $639, Brownsville at $675, and Tulsa at $676.
Currently, only 29 states, including D.C., have a minimum wage above the $7.25 per hour pay rate, and more information on which of those states are included can be found with the NCSL. Those wages in the 29 states are not necessarily a large jump overall, considering other figures, such as rent and housing costs. Take, for instance, California’s increase to $11 and compare monthly earnings to the current average cost of living in areas within the state. Such a comparison paints a picture which some find unsatisfying. Missouri is also listed among the 29 states to increase minimum wage, but their per hour increase was only to $7.85, making that a 60 cent raise.
It is not only 16-year-olds working these minimum wage jobs and living with parents. The Bureau of Labor Statistics released a report in March, 2018, characterizing who exactly is working minimum wage jobs to pay for their housing and other living expense. Half of those being paid minimum wage or less are over the age 25, with a higher percentage of women representing those figures when compared to men.