Renting does not offer debt relief for many
Traditionally, young professionals were thought of as ideal candidates for apartment rentals, as renting can provide individuals with the opportunity to save money for a down payment on a house later on. The reality of the situation is, however, that people throughout the state of Florida and beyond have been forced to turn to renting out of necessity after facing foreclosure and other financial hardships. And while renting is meant to serve as an affordable housing option, the influx of renters on the market is having an adverse effect on affordability.
Financial issues like unemployment, personal bankruptcy and foreclosure have prompted thousands of families to move into apartments in recent years. One issue is, though, that just as the demand for apartment rentals went up new construction began to slow. Beyond that, wage rates have failed to increase with mortgage rates, causing a serious discrepancy between the demand for and supply of apartment rentals across the country. All of these factors have contributed to the continuous and significant increase in national rent prices, even as vacancy rates have dropped by around 50 percent in as little as four years alone.
More than 120,000 apartments were added to the national market last year. That has done little to ease the demand for apartments in cities across the country, and it is estimated that rental prices increased more than three percent in 2013. The considerable increase in rent comes at a time when the income of the average renter has decreased by 13 percent.
It is worth noting that investors and property owners do stand to benefit from rent increases, but that may be little consolation to the large percentage of renters that are struggling under the weight of rent hikes.
Source: Time, “Growing Demand For U. S. Apartments Pushing Up Rents,” Alex Veiga, April 3, 2014