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Renters feel the pinch
The apartment sector has produced some fat gains over the past several years, putting a smile on investors’ faces. For many tenants, however, turn that smile upside down.
In many metros across the United States, rents have shot up dramatically during the past five years, according to a recent report by the National Association of Realtors. And while this has made investors and property owners happy, renters have felt the squeeze from rising rental costs, especially because increases in household incomes have lagged considerably. In fact, NAR reports during the past five years rents have increased faster than incomes in all but four of the 70 metro areas included in the study.
The growing gap between rent and income was most severe in the New York City metro, where tenants realized only an 8 percent increase in income to offset the 50 percent increase in rents. Other markets seeing rising rents are strongly focused on the technology and energy sectors.