XLRE - Will Rent Prices Finally Cool Down? Key Indicator Offers Hope But Major Cities Remain Unaffordable | Benzinga
With the median American tenant paying $2,147 in rent, according to Zillow data, residents are desperately hoping for a drop in rent prices that could come if home vacancies rise.
As per U.S. census data, more than half of U.S. renters pay over 30% of their income in rent, crossing the line where rental units stop being considered affordable.
The situation is prompting renters to remain in their rental units for extended periods, aiming to minimize rent increases. This trend is also a result of historically high mortgage rates, which are deterring tenants from securing loans for their first homes.
The measures, however, change drastically depending on the location. New York City continues to be one of the less affordable locations for tenants, with workers that earn as much as $135,000 a year still unable to afford 65% of the city's available properties.
In California, large cities are seeing a decline in annual rental rates. Annually, Oakland was down 9.1%, Sacramento dropped 8.1% and Los Angeles declined 5%.