“Anecdotally, I heard a story of rent going up $300 with very little notice,” Danetha Doe of Clever Real Estate told Mortgage Professional America during a telephone interview. “Our study looks at the period between 1985 and 2020, but in the last couple of years those prices have seen a steep increase.”
With rent prices outpacing wage gains, the study showed millennials have less disposable income than previous generations to save for a down payment. Millennials who have paid the median rent price every year since 2010 have spent about $129,420 on rent over the past decade, according to the findings.
In urban areas that often appeal to young people, analysts found rent prices have doubled in half of the 50 largest US cities since 2000. A full 10% of those cities have a rent-to-income ratio that exceed the recommended 30% for financial health, including San Francisco (49%), San Diego (40%) and Miami (33%).
Another finding: Although renting remains cheaper than buying for most households nationwide, rent price increases actually surpassed home price gains in seven metros, including Birmingham, Alabama — where the change in rent prices is 92% greater than the change in home prices since 2000.