The numbers are in! According to Zillow's recently released study, a staggering $441 billion was spent on rent in the U.S. in 2014. This marks an increase of over $20 billion from 2013.
Of course, median asking rent has increased steadily for the last 20+ years, as demonstrated by this graph below.
Recent increases, however, have been particularly astronomical.
In an effort to wait for an improved economy (or due to misinformation about home buying), many Millennials have postponed purchasing a first home. This has resulted in an increased demand and significantly lowered vacancy rates for rental properties.
Ruth Mantell recently reported in MarketWatch that landlords have ramped up rents for the fastest pace in six years, in conjunction with national vacancy rates the lowest that they have been in two decades.
Zillow Chief Economist Stan Humphries corroborates this information, adding that rent increases are likely to continue:
"Another increase in total rent paid similar to that seen this year isn't out of the question. In fact, it's probable."
Getting out of the renter's trap isn't easy, but it is necessary. We now know that it is significantly more affordable to buy than rent in the U.S., and this will likely continue to polarize with time. Now is a critical point for renters to take the plunge and purchase their first home. In this action, the money previously spent on rent is now being used to invest (and force savings).
If you aren't sure how to begin the process of finding your first home, don't hesitate to give us a call with any questions you might have. We would love to help you.
