American Rent Costs Reaching New Highs

Image Credit: Huffington Post

Rent prices across the US are higher than ever before, and people are taking some drastic measures to avoid paying more.

Recent findings by Business Insider reveal that rent and housing prices in America’s biggest cities are not affordable for many residents. The current median rent in the US is $1,700, which is nearly triple the median rent of $588 in the 1960s (adjusted for inflation). This is one of America’s most serious economic challenges, as student loan debt and the rising costs of housing are the largest obstacles to home ownership. An aspiring homeowner needs to spend 4-10 years saving in order to be able to afford a 20% down payment on a mortgage for a median-priced home in one of the top 25 US cities. That assumes that the aspiring homeowner is saving 20% of their annual earnings.

Another problem is that even for those who have the money, getting a good place in a city like New York or San Francisco is still highly restrictive. The median home value in those two cities is $1.3 million, so it’s no surprise that more and more people on the west coast are resorting to just living in a car. In California in particular, real estate is so pricey that even tech workers are living in cars. There are even movements that have sprung up as a response to this problem, including the #vanlife movement. Another creative way some people are fighting these rising costs is through purchasing a boat for a home, at which point you just need to pay docking fees, which are far cheaper than rent.

In an economy where housing is so expensive, we can expect to see more people resorting to creative alternatives to “normal” home ownership. High rent costs are a critical metric in an economy, and have a deep social and economic impact.

Written by  
5 years ago
Article Tags:
· · · ·