Rents are soaring across the US. 2014 has seen a massive increase in rent. According to the latest reports by Zillow.com, Americans paid more than $441 billion in rent in 2014, which is 4.9% more than 2013.
As far as North Texas is concerned, the report showed that the locals spent $600 million dollars more on rents. The total expenditure on DFW Metroplex residents was $10 billion, which was 6.2% more than 2013. The median rent in the DFW saw an increase of $35/month this year too, which is higher than the median nationwide rise of $26.
Major cities of California i.e. San Francisco (13.5%) and San Jose (14.4%) saw the highest increase in rent.
According to Zillow’s chief economist Stan Humphries, “Over the past 14 years, rents have grown at twice the pace of income due to weak income growth, burgeoning rental demand, and insufficient growth in the supply of rental housing. This has created real opportunities for rental housing owners and investors but has also been a bitter pill to swallow for tenants, particularly those on an entry-level salary and those would-be buyers struggling to save for a down payment on a home of their own. Next year, we expect rents to rise even faster than home values, meaning that another increase in total rent paid similar to that seen this year isn’t out of the question. In fact, it’s probable.”
On the other hand, home prices saw a lot of stability in 2014. A report from Capital Economics shows that the price gain is likely to stabilize around 4% in 2015. Mortgage rates will increase to 5.5% by the end of 2015 but it won’t affect the housing affordability. Due to the massive increase in rents, prospective home buyers are keener on buying a property rather than renting one. That’s why; home affordability will be more encouraging than the historical norm.