This Chart Says Americans Can Afford High Apartment Rents
Rents have increased in cities across the country, but a new report claims most people can afford it.
Apartment List reports rents continued to increase month-over-month as of September at a rate of 0.2%, but a study by RealPage chief economist Greg Willett shows the median income of renters rose 36% in the last six years from $45K in 2010 to $61K in 2016.
The rent-to-income ratio has remained steady at 23% during the same period, Bloomberg reports.
The data was based on 5.7 million leases in the RealPage database but does not include student and senior housing complexes or apartments with fewer than five units.
Census data, which includes student and senior housing, shows the median income for renters of market-rate apartments to be around $32K.
The discrepancy between the data sets likely has to do with more affluent renters demanding higher-end rental properties, pushing landlords to improve and reposition the apartments before listing them at higher prices, according to Bloomberg.
In March, Yardi reported a large wave of new apartment supply was going to come online in 2017, which was expected to shift the market dramatically.
Most of that new supply fell into the high-end category and was planned for larger metropolitan markets, including Nashville, Seattle, Miami, Denver, San Antonio, Dallas, Austin and Portland.
Increasingly high rental rates have forced many people to migrate out of these markets and into more affordable areas.