A decade of unprecedented growth in the rental housing market may be coming to an end, according to our 2017 America’s Rental Housing report from Harvard University.
Fewer new renter households are being formed, rental vacancy rates have risen, and rent increases have slowed. At the same time, renter demographics are changing and nearly 21 million households continue to pay more than 30 percent of their income for rent.
After a decade of broad-based growth, renter households are increasingly likely to have higher incomes, be older, and have children. The market has responded to this shift in demand with an expanded supply of high-end apartments and single-family homes, but with little new housing affordable to low- and moderate-income renters.
The lower your income, the more likely you are to feel squeezed by your rent. Over the past 15 years, more than half of the growth in cost-burdened renters has been among those earning less than $30,000.
Among Americans earning $45,000 to $75,000 a year, about 23 percent are cost-burdened — that’s nearly double the share in 2001, the study found.
High-income Americans are also increasingly opting to rent, with the study finding that households with real annual incomes of more than $100,000 were responsible for 29 percent of the new 9.9 million renters who entered the market over the last decade.
Many of those high-income renters live in pricey cities like New York and San Francisco. States like California, Colorado, Florida, Hawaii and New York are more expensive to live and contribute to a higher housing cost burden.
The report found that states with the fewest share of cost-burdened renters include Montana, North and South Dakota and Wyoming.