The cost of living is going up for everyone. However, a new report by Realtor.com suggests that renters are feeling the biggest squeeze, and this trend could be set to continue.
In the report, analysts looked at data into monthly budgets. They found that renters in the US were spending 30% of their total monthly budgets on rent last month.
Additionally, many renters could be paying a much higher proportion of their income on rent. The 30% figure given was the average, but for renters in 14 of the largest US markets, the percentage is a lot higher as rents continue to skyrocket.
Some of the least affordable areas to rent in America include the Sun Belt metros like Miami, Tampa, San Diego, and Los Angeles, as well as popular cities like New York and Washington.
The report shows that, overall, the median rent in the US hit a new high of $1,792 in February, which is more than 17% higher than the same time last year.
This was true of all property sizes and types. Studio apartments had a larger increase than other apartment sizes, as they grew to a median price of $1,474.
Larger units also saw a sharp increase in price. For both one and two-bedroom units, there was a price rise of 16%, with the median rent on a two-bedroom unit reaching more than $2,000 a month for the first time.
“With rents surging nationwide, February data indicates that many renters’ budgets may be stretched beyond the affordability limit,” said Realtor.com Chief Economist Danielle Hale.
He added, “Fast-rising mortgage rates and still-limited numbers of homes for sale could mean some would-be buyers may stick with the flexibility of renting. With rental demand already outmatching supply, rental affordability will remain a challenge.”
The rising cost of rent is increasingly causing an affordability issue for renters. It also makes it harder for those wanting to save money to buy a home in the future.