The cost of renting a home in the United States is rising and young workers have felt the most pain, many of them taking on additional jobs or roommates to cover the cost of housing.
Household rents jumped 10% from pre-pandemic levels in 2021, according to Census Bureau estimates released last week. The figures come as rising health care and rental costs unexpectedly soared US consumer prices last month.
Data from the bureau’s annual American Community Survey put the median American rent at $1,037, up from $941 in 2019. The year-over-year increase in median home rents over the past decade was typically 2% or 3%—the one exception was a 5% increase from 2018 to 2019.
Those most affected include recent college graduates and other freshmen in the workforce, who have little in savings and cannot afford to buy a home.
Take Maeve Kozlark, a doctoral student at New York University. The 23-year-old spent a year in an apartment in the Queens Borough of New York City that had a door that wouldn’t close. Her landlord’s refusal to fix the latch prompted her to make a TikTok video about it.
After a year and 230,000 views, the lock was still broken when its landlord announced a $1,000 increase over the current rent of $2,500, Kozlark said. She left the apartment in June.
“So began our crazy quest to find something that was affordable and not a shoebox, which is pretty much impossible,” said Kozlark, who considers himself lucky to find a new place to rent for $3,300 in Queens.
Similar accounts of sudden price increases and rental struggles exist across the country. In Austin, Texas, 22-year-old Skyler Lee signed a one-year lease for a two-bedroom apartment for which she and her boyfriend together pay $1,950 a month in rent.
Within a month of moving in, comparable apartments in the building were being rented at $2,400 per month – something Lee expects to pay to renew his lease next year.
In Chicago, 23-year-old Calvin Angelo Kappe decided to rent outright and live with family in Chicago because he expects to pay around $1,000 in monthly rent, which he needs to pay for a job. I cannot tolerate.
On the West Coast, 21-year-old Celine Pun initially added a housewife to her Santa Barbara apartment to make the cost affordable. But she moved out when the monthly rent for her share of the three-bedroom apartment increased by $600 and some of her five housemates left.
“It was a very frustrating process,” Pun said.
As the renters woes increase, rents in the professionally managed sector – typically large properties operated by management companies – have risen even more dramatically.
According to the Harvard Joint Center for Housing Studies, annual rent growth was 11.6% in late 2021 and early 2022, nearly tripling in the five years before the pandemic. At the same time, the vacancy rate fell to its lowest level since 1984, as demand increased after the pandemic.
“It’s a really unprecedented market in many ways,” said Whitney Airgood-Obrikey, a senior research associate at Harvard Housing Center.
A major factor in all this has been the COVID-19 pandemic.
As coronavirus infections spread in 2020, wealthy people moved to summer homes or remote areas to escape infection, leading to huge vacancies and rent cuts in many cities.
Now, homeowners are making up for those losses while trying to recoup higher maintenance and insurance costs, said Alexandra Alvarado, marketing director for the American Apartment Owners Association, which represents small landlords.
With short supply in large cities and rural areas, where more people have moved for remote work, landlords may ask potential tenants to show more income than previously needed, she said.
Adding to the demand, most people in their 30s continue to live in apartments and are unable to buy homes, said Michael Keane, assistant professor of urban planning at New York University.
“They are stopping the new rental population that was behind them,” he said.
Certain minority groups are also more likely to feel the pinch. Ingrid Gold Allen, professor of urban policy and planning at New York University, said parents of black renters are less likely to own a home — a major source of wealth in the United States — and could help them financially. .
A recent survey by real estate company Zillow found that renters of color are asked to pay a higher security deposit and higher application fees than their white counterparts.
This all made up for a market where securing any apartment can be a big deal in some areas. In New York – long known for its competitive and pricey rental market – apartment hunters are reported to be looking for tenants with an annual salary of at least 40 times a month’s rent, or with guarantors. Those who earn more than 80 times of a month’s rent.
Recently, 22-year-old college graduate Caleb Seaman started delivering for Uber Eats alongside his full-time job at a think-tank to cover housing costs. Still, Seaman says she only got the New York apartment because one of her roommate’s parents acted as a guarantor.
“It’s a remarkably difficult and privileged thing to be able to get the cheapest apartment on the market right now,” Simmons said.