According to a recent report from Zillow, rents in April were 4% higher than a year before. This outpaced home prices which rose by 3% and was the fastest increase in two years. In Las Vegas specifically, rent prices rose 2.1% in April from last year.
Rental affordability is also getting worse and doesn't look to be improving anytime soon. "This is here to stay. We will continue to see rental increases, and affordability will get worse before it gets better," said Svenja Gudell, Senior Director of economic research at Zillow. "Income hasn't kept up with rental increases. You are having to spend much more of your monthly income on rent and it's a concern. It's a national concern."
Rents have increased faster than home values in 20 of the 35 largest markets. Since 2000, we have seen a steady rise in rents with no signs of slowing. Yet even as rents climb there is still a strong demand for rentals, creating a heavy housing crunch in many cities.
On a national scale, homeowners can pay an average of 15.3% of their income on mortgage each month, whereas renters will pay roughly 30% on rent - a huge difference as noted by Zillow's report. Although low mortgage rates certainly make home buying the more attractive option, renters have difficult saving up down payment due to their large monthly rent checks.
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