NUTSHELL OF THE SITUATION
High-earning needed to cover housing expenses in mentioned cities for renters.
Rent prices have soared and ripped past wage increases, pushing up the number of unaffordable markets since the pandemic hit. Despite a year-long decline, rents are yet to hit pre-pandemic levels, with Trump's tariffs on imported building materials posing a significant threat to a potential recovery.
A CLOSER LOOK AT THE RENTAL LANDSCAPE
Ever since April 2020, rent for a typical U.S. apartment skyrocketed by 29% to a whopping $1,858 monthly. Single-family rents shot up by an astounding 43% to an eye-watering $2,256. Median household incomes, however, didn't follow suit, inching up only 22.5% over five years to settle at $82,000, according to Zillow.
The median renter still spends less than 30% of their income on rent - a general standard consumers strive for – but that proportion has swelled by 10% compared to five years ago, jumping from 27% to 29.6%.
Income has not kept pace with rent prices, except for in San Jose and San Francisco. Median households would need to part with more than 30% of their income to cover rent in these cities.
TARIFFS ON BUILDING MATERIALS: A FOIL TO RENT RELIEF?
Despite tariffs on imported building materials such as lumber from Canada and construction materials from Mexico and China, haven't directly caused the decline in rent prices. Instead, tariffs have increased the costs for builders, potentially escalating housing prices and ultimately rents.
While new home construction might have brought some affordability gains via smaller homes and lower mortgage rates, tariffs may impede this progress by jacking up building costs.
Other factors, such as supply and demand, have affected the rental market, but tariffs haven't been the primary cause of low rent prices. The shortage of homes in the U.S. has primarily fueled the soaring rental market.
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