The cost of renting a home or apartment in the United States has been on the rise for years. In fact, the average rent for a one-bedroom apartment in the United States is now over $1,200 per month. This is a significant increase from just a few years ago, and these rental prices are putting a strain on many renters’ budgets. To put this in perspective, the average renter in 11 markets across the country must now earn at least a $100,000 salary in order to avoid being classified as “rent-burdened”. By definition, consumers who are considered rent-burdened spend 30% or more of their incomes on rent and therefore struggle to pay for other necessities, such as food, fuel, and medication. Those who spend 50% or more are considered to be severely rent-burdened.
To further analyze rental prices, the Waller, Weeks And Johnson Rental Index is a monthly reported project that is co-produced by the Florida Atlantic University Real Estate Initiative, Florida Gulf Coast University’s Lucas Institute for Real Estate Development & Finance, and the Alabama Center of Real Estate at the University of Alabama.
Increased demand + limited supply = higher rental prices
There are a number of factors that have contributed to the rising rental prices in the United States. One factor is the increase in demand for housing. The population of the United States is growing, and this is putting more pressure on the housing market. In addition, many people are choosing to rent instead of to buy a home, as home prices have also been on the rise.
Another factor contributing to the rising rental prices is the shortage of available housing. Simply put, there are not enough homes for rent to meet the demand. This is especially true in major cities, where the cost of living is already high.
Summary
As we have written about previously here and here, the increased popularity of the virtual workspace has removed all geographical boundaries for the real estate market. Perhaps no other housing market in the country has benefited more from this than the South Florida market. As a result the demand for housing throughout South Florida has skyrocketed, which has led to rapidly rising rental prices.
If you are a real estate investor, this may be a great time to consider adding an income property to your investment portfolio. With mortgage rates rising or remaining at higher levels, we are seeing a higher demand for rental properties. If you are thinking about investing in the South Florida market, we can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your mobile device.
