Rents get less affordable
As homeownership gets more expensive in 2014, many Americans may choose to rent instead of buy. That could put more pressure on already unaffordable rents.
Although rent growth has somewhat stabilized after a steady rise in 2011, rents are still increasing at a faster pace than overall inflation, according to a recent study by the Joint Center for Housing Studies of Harvard University. One in four renting households spend more than half of their income on rent and about half spend more than 30 percent of their income, according to the study.
Demand for rentals continues to grow, especially for single-family homes, says Wally Charnoff, founder and chief executive officer of RentRange LLC, a rental market data company.
"We are seeing a shift where people seem more comfortable renting single-family homes in suburban neighborhoods instead of apartments," he says.
Rents aren't increasing everywhere in the nation, he says. But they are more likely to rise in areas with strong job growth, shows the Harvard study.