Apartment Rents Soar Amid Record Inflation
Rents Are Up 20% in Popular Areas
When it comes to rising prices, renters are feeling an outsized amount of the inflationary pain. The median rent in popular areas including Phoenix, Arizona, Boise, Idaho, and Tampa, Florida, soared close to 20% during the last year. In some cities the uptick in rent is even higher. The monthly cost for a one-bedroom apartment in Sarasota, Florida is 40% more this year than last.
One reason rent prices are skyrocketing is a lack of available homes to purchase. With interest rates at historic lows and people leaving major cities, there aren’t enough houses for sale. The ones that are available are too pricey for many buyers. This means they are renting instead, once again pushing up the prices for apartments and the overall cost of living.
Renters Need to Curb Expenses
The rise in rents comes at the same time that inflation is at a more than 30-year high, hurting the budgets of millions of Americans. As a result, some renters are saving less, changing their lifestyles, or moving to cheaper locations.
Most financial advisers say renters should try to keep their housing expenses at around one-third of their monthly pay after taxes. If that is not an option, finding other areas to reduce spending can help make high rents more manageable. Living expenses should ideally be a maximum of 50% of the take-home pay. Rent that is more than that may leave little room for savings, entertainment, and other expenses.
Falling Behind on Payments
For renters falling behind, one option is to discuss rent modification with the landlord or have the increased rent spread out over a few rent payments. There are also rental assistance programs available throughout the country that may reduce some or all of the cost of rent.
If rent is expected to rise next year, renters should be prepared to negotiate. Landlords might say no in tighter markets, but it’s important for tenants to highlight their strengths, be open to compromise, and have a backup plan. Inflation is impacting every corner of the economy and rent is no exception.
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