Renting a home in today’s housing market has skyrocketed across the U.S., and there are no signs of it slowing down.
According to data collected from Realtor.com with properties containing two or fewer bedrooms, the 50 largest metro areas in the country have experienced a median rent increase to a staggering 19.3 percent from December 2020 to December 2021.
However, AP News reported that Miami’s metro area, where the rent has escalated to $2850, is 49.8 percent higher than the previous year.
Several cities in Florida, including Tampa, Orlando, and Jacksonville, have witnessed a spike of more than 25 percent. At the same time, San Diego, Las Vegas, Austin, Texas, and Memphis, Tennessee, faced the same increases in the market.
According to the Center on Budget and Policy Priorities, 23 percent of Black American renters have fallen behind on rent among the 12 million adults living in rental housing. Since the pandemic started, Black households have struggled with rising rents and housing shortages.
Data obtained from CoreLogic stated that rent rose 9.3 percent in August 2021, increasing 2.2 percent compared to August 2020, CNBC reported.
When Keisha Green, a single mother of five, moved into her two-bedroom, 1½-bath Dallas townhome in 2017, the rent was $1,380. Now at $1,700, Green has grappled with paying her rent while maintaining a job to support her family.
“Being a single mom,” she said, “I can barely afford this.”
Green initially had two jobs with steady paychecks coming in to pay her bills. Like other consumers, she wanted to live the American dream by renting a bigger place or purchasing her first home. As the COVID-19 pandemic continues to cripple Black Americans, Green’s vision was indefinitely put on hold.
Black households have been hit harder than any other race in the housing market long before the pandemic made it a lingering issue. The existing inequalities they face in housing are an even bigger crisis.
“The pandemic exacerbated inequalities that have existed for a long time,” said Jaboa Lake, policy research manager at Race Forward and a former senior policy analyst at the Center for American Progress. “What was already a crisis became an even larger one.”
The steady increase in rent has become one of the nation’s top economic problems. While there are small increases in existing rental properties and new listings, data collected from the Labor Department indicate that they will likely surge in pricing.
Last week, the federal agency said rental costs rose 0.5 percent in January from December, declaring it the most significant increase in 20 years, and will continue to accelerate.
Many Americans have turned to local government agencies and organizations for rental assistance after falling behind in their rent payments due to pandemic-related matters. More than $2.3 million was paid to 420,000 households that required financial relief to prevent eviction in August. According to the Treasury Department, the funds were the most paid in that month than any other month to date.
With no rent moratorium in place, Black households are likely to be affected and fall short in their rent payments, Lake said. Black women are at greater risk among Black renters.
“Low-income renters, who are disproportionately people of color, are going to be the most impacted because higher-income renters are going to be competing for the limited stock of housing that renters of color have access to,” she said.
Economists are concerned with the impact of rental increases on inflation as new leases make up the U.S. consumer price index, which is used to measure inflation.
While inflation climbed to 7.5 percent in January from a year earlier, economists believe rising rents could keep inflation high through the end of the year since housing costs make up one-third of the consumer price index.
According to the U.S. Census Bureau, rental vacancy rates during the fourth quarter of 2021 dropped to 5.6%, the lowest since 1984.
“Without a lot of rental [vacancies] that landlords are accustomed to having, that gives them some pricing power because they’re not sitting on empty units that they need to fill,” said Danielle Hale, Realtor.com’s chief economist.
Hale said the increasing presence of investors would continue rent hikes due to the pricing power with low vacancies. “I don’t think that’s the only driver,” she said.
Investors have primarily contributed to the shrinking demand for affordable housing for low-income Americans.
