For the fourth month in a row, the cost of rent has increased sharply; this time it was a 3.7 percent year-over-year increase in March. With more Americans renting than ever before, the effects of these increases are being felt far and wide.
As demand continues to outpace supply in the multifamily housing sector, renters have had trouble keeping up with the increases. But the problem isn’t solely restricted to ever-increasing rents. The sluggish rate at which wages are growing isn’t helping matters any.
Even though the unemployment rate is dropping and the number of people filing for unemployment benefits is at its lowest rate since 1973, wages only grew 1.4 percent.
As MarketWatch reports, using the 2015 median income of $56,746, that 1.4 percent gain would equal about $66 more a month before taxes. Using the median rent for a two-bedroom apartment of $1,300, a 3.7 percent rent rise would equal $48, essentially negating the wage gain.
Meanwhile, as the cost of energy has dropped and consumer goods like clothing and groceries have stayed relatively low, the two biggest expenses for most households, rent and medical care, have skyrocketed. Medical care grew at the fastest rate in more than three years in February.