With the national home sales inventory disappearing and rising inflation and mortgage interest rates, the rental housing market is busting at the seams attempting to meet demand. And in some states, 25% of the people lucky enough to find available rental property are now behind on their monthly payments.
Nationally, 15% of American households — around 6 million — are behind on rent this fall, according to a new report from commercial real estate website MyEListing.com.
One of the factors affecting a renter's ability to pay is the rapid increase in monthly rent averages. A combination of supply and demand deficiencies and pandemic rent moratoriums caused rental property owners and investors to raise monthly rents.
According to Zumper, the largest privately owned online rental site in North America, these factors have increased the national median average of a one-bedroom rental, which has reached a new high of $1,503. The two-bedroom national median rent is now $1,845, another all-time high.
MyEListing.com listed the top 10 states suffering the most significant percentage of people in arrears on their monthly rent:
- South Dakota (26%)
- Alabama (25%)
- New Jersey (24%)
- South Carolina (22%)
- Connecticut (21%)
- Delaware (20%)
- Arkansas (20%)
- Kentucky (20%)
- Louisiana (20%)
- New York (19%)
While MyEListing.com found that renters in South Dakota, Alabama and New Jersey have the most trouble making their monthly payments, renters in Miami, Houston and Philadelphia are those most behind on rent. Americans ages 40 to 54 have the greatest difficulty keeping up with their rent payments.
And while rent payment deficiency is a significant burden on renters, private property owners and investors, Zumper reports signs that rents may be coming back to earth in some locales as new construction continues to ramp up to meet demand. Modest month-over-month declines in cities including Minneapolis, Nashville, Tennessee; El Paso, Texas; and Jacksonville, Tampa and Orlando, Florida, have been reported. Fresno, California, which saw some of the biggest rent jumps in the country last year, is down 3.9% this month.
But according to Zumper spokesperson Crystal Chen, future renters better jump on rent declines now as the seasons change. “Winter is the best time to get a deal,” she said. “That’s when demand is at its lowest, and landlords want to fill vacancies before the holidays.”
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Image by F. Muhammad from Pixabay
