US Also Struggles with Soaring Rent... New York Rents Up 40%

ADS "58% of US Homes Cheaper to Buy Than Rent"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyunjung] Renters across the United States are struggling with soaring housing costs. In some cities, average rents have increased by nearly 40% in just one year, and in certain areas, rental housing costs have been found to be higher than home purchase prices.

The Washington Post (WP) reported on the 30th of last month (local time) that average rents in some U.S. cities have risen by 40% compared to the previous year. According to local real estate company Redfin, monthly rents in areas such as New York, Austin in Texas, and Miami have jumped 40% compared to last year. The nationwide average rent rose 14% to $1,877.

Daryl Fairweather, Chief Economist at Redfin, stated, "Rents surged in the second half of 2021," adding, "The economy was temporarily halted due to the COVID-19 pandemic, and now that conditions have resumed, rents are rising alongside inflation." Frank Nothaft, Chief Economist at real estate data company CoreLogic, evaluated, "Even if inflation in all other components of the Consumer Price Index eases, rising rents alone could keep inflation levels elevated throughout this year."

So far, the Biden administration has launched a $46.5 billion emergency rental assistance program to help residents in cities such as Washington DC, Houston, and San Diego pay rent and utilities. The government has also announced plans to supply approximately 100,000 housing units over the next three years.

According to an analysis of 2018 census data by the Joint Center for Housing Studies at Harvard University, 11 million U.S. households, or one in four renters, spend more than half of their monthly income on rent. Experts believe this proportion has increased significantly recently.

Dennis Shea, Executive Director of the Ronald Terwilliger Center for Housing Policy, emphasized, "Too many Americans are unable to buy homes," adding, "There is insufficient housing supply for both renting and buying, and naturally, low-income families are the hardest hit."

According to the National Association of Realtors, the proportion of first-time homebuyers in the U.S. has dropped to its lowest level in over eight years. The association reports that nearly one million landlords were unable to sell their homes last year due to rising real estate prices and surging demand.

While there are differences by market, CoreLogic's home price index shows that nationwide home sale prices rose 18.1% in November last year compared to the previous year. According to rental housing platform Apartment List, rents nationwide increased by nearly 18% from early last year through December, marking a record rise.

On the same day, WP also reported a survey result showing that in 58% of the U.S. housing market, owning a home costs less than renting. Real estate information company Attom Data Solutions, based on its home sales statistics, U.S. Department of Housing and Urban Development rental data, and Bureau of Labor Statistics wage data, found that in 666 out of 1,154 counties, owning a median-priced home (with three bedrooms) is cheaper than average rent. The report indicated that among 42 counties with populations over one million, 35 showed renting to be cheaper than buying, and among the 25 most populous counties, 21 had renting costs lower than purchasing.

This content was produced with the assistance of AI translation services.