With less people owning and the prices of real estate at all time highs, rental rates are following suit. Rental rates are getting to the point where it makes more sense to try and buy. No different here in Telluride, Colorado. Real Estate, Dan Henschel.
Rising rents are pushing more tenants past the breaking point
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Rents have increased rapidly across U.S. housing markets as the share of renting households has risen faster than the number of new units. Now, in a survey published Thursday by an apartment-listing service, nearly one in five respondents reports struggling to make the monthly payments.
While big landlords seem to be succeeding at finding tenants who can keep up, the survey, by Apartment List, suggests escalating housing costs may be straining renters’ resources. Eighteen percent of respondents couldn’t pay the full rent due in at least one of the past three months, according to the poll of 40,000 renters. Of those who have registered for the listing site this year, 3.3 percent said they had been evicted in the past, up from 2.8 percent in 2015.
The findings were controlled for income distribution across the website’s 8 million users, according to Chris Salviati, an economist at Apartment List. Its listings skew toward higher-end apartments, attracting more-affluent renters, Salviati said, though it also attracts lower-income renters casting a wide net.
Among households earning up to $30,000 a year, 27.5 percent failed to pay the rent in full in at least one of the past three months. Among those earning $30,000 to $60,000, it was 14.8 percent. Even of those making more than $60,000 a year, it was 8.8 percent.
Eviction rates were higher in metropolitan areas hit hard by the U.S. foreclosure crisis, Salviati said. They were lower in high-cost coastal regions, where strong job markets give landlords a more affluent pool of renters to choose from.
“It you’re a renter who’s going to have difficulty paying the rent, you’re going to have a harder time finding an apartment in the first place,” Salviati said.
The self-reported survey doesn’t show exactly how renters are weathering rising costs, but it offers insight into a poorly understood corner of the housing market. Formal eviction proceedings are processed through local courts, making data difficult to aggregate. Renters who have been evicted once are often blacklisted by landlords, Salviati said.
The Apartment List data suggest the burden is worsening from just a few years ago. The Census Bureau’s 2013 American Housing Survey included a series of questions on whether tenants were having trouble paying the rent. Seven percent of renter households failed to pay all or part of the rent in the preceding three months, according to the survey, which didn’t include a question on delinquent payments in 2015.
The share of households considered rent-burdened--meaning they spend more than 30 percent of their income on debt--ticked down in 2015 but is still historically high. Forty-one percent of renters, meanwhile, said it was hard to find affordable housing near their jobs, according to data from an August survey published by Freddie Mac.