It might be tough to buy a home in many markets these days, but renting isn’t a cakewalk either, as the housing shortage extends to rental properties.
Rents rose about 3.8% nationally in 2016, although uber-pricey markets like San Francisco and New York City are beginning to soften, the report noted.
The number of units on the market for under $800 a month dropped by about 261,000 from 2005 to 2015. Meanwhile, those going for $2,000 and up rose by 1.5 million.
That’s because the annual rental vacancy fell to 6.9%—the lowest level it’s been in more than 30 years.
The number of multifamily buildings on which construction began in 2016, which includes rentals, co-ops, and condos, fell 1% annually, to 393,000 units. And the majority of those buildings are luxury geared toward wealthier tenants and buyers.
That’s led to only about 45% of renters who can afford the median rent in their metro. Those rooftop dog parks don’t come cheap! But that drops to fewer than 1 in 10 along the big coastal cities.
About 11 million renting households are severely burdened, putting more than half of their income toward housing in 2015, according to the most recent data available in the report. An additional 21 million renting households are burdened, putting more than 30% of their income toward paying for their housing.
“A large number of renters are having trouble affording rents,” McCue says. “It takes longer to move out of parents’ houses or live independently without roommates [in expensive areas].”