Rents across the country have gone through a period of historical growth in the past two years. According to real estate research firm CoStar Group, rents in the U.S. rose 11.3% last year. In contrast, over the previous five years, gross rents increased by 18.1%.
Rising rent prices are the result of soaring inflation and a squeeze on inventory. This lack of supply relative to demand comes as the number of people seeking to rent has increased substantially during the pandemic, while the number of available properties has been limited by shortages of building materials and other delays in construction resulting from the pandemic. This is the industry laying off the most Americans.
To determine the 50 cities with the highest rent, 24/7 Wall St. reviewed five-year estimates of median gross rent from the U.S. Census Bureau’s 2020 American Community Survey. The median gross rent across the United States is $1,096, and in the 50 cities on this list, defined as having populations greater than 25,000, monthly rents range from $2,305 to $3,375.
California alone is the home state of 39 of the 50 cities with the most expensive rent. Included are some of the affluent communities of Silicon Valley, such as Cupertino, Los Altos, Saratoga, and Palo Alto, as well as the most expensive parts of Los Angeles, San Francisco, and San Jose. Other states with cities on this list include Virginia, with three, and Hawaii, New Jersey, and Massachusetts, with two each. These are the states with the highest rent.
In many of the cities where rent costs are higher, a larger share of housing units are occupied by renters, rather than homeowners. This is largely because these places have more expensive housing markets as a whole, meaning residents are priced out of the possibility of owning a home and are forced to rent. Nationwide, the median home value is $229,800. In all 50 cities on this list, the typical home is worth at least double that, and 23 cities on this list have a median home value in excess of $1 million.
Property is actually, in many of these places, relatively affordable after accounting for the typical resident’s income. In roughly two-thirds of the cities on this list, median gross rent accounts for less than 29.6% of the local median household income – the national figure of rent as a percentage of income. In Los Altos, California, which has the highest rent of any city, the median gross rent is equal to 19.2% of the city’s annual median household income. These are the richest cities in America.
Click here for the cities with the highest rent
Click here for our detailed methodology
Sponsored: Find a Qualified Financial Advisor:
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Source: Read Full Article