Rental prices have started to slow down, having risen at a much slower rate in October compared to previous months. Median rents increased about 4.5% from last year at this time, compared to 5.3% in September and 6.2% in August. Could this be a sign that rents have finally stretched renters’ incomes too high?
Rental prices have steadily increased, but has income?
As stated above, rents have increased steadily from the previous year, while the average wage has only increased about 2.5% over the past year, sucking up over 30% of a person’s income on average. In cities like Denver, San Francisco, Portland, and San Jose, rents have risen by more than 11% over the last year, while Chicago, Philadelphia, Detroit, Minneapolis, Baltimore, and Pittsburgh all saw decreases in rent from the previous year.
According to the Denver post, the median rent across the nation was about $1,382.00 in October, which roughly works out to 30% of the nation’s median family income of $53,657.00. In the third quarter, Real Property Management Colorado, alongside with RentRange, discovered that the average rent for a 3-bedroom single-family home in the Denver area was about $1,998.00. That’s certainly high enough to stretch the average renter’s purse strings a bit.
But another explanation for the slowdown is simply the season.
Typically, the winter months are slower as the amount of people looking to move decreases, especially with the holidays right around the corner. This also means that properties up for rent may see a longer vacancy time, especially if they’re over $2000.00 per month, as we’ve seen here at Real Property Management Colorado.
