As rents soar and the supply of rental housing remains constrained, 2015 could be the tipping point, pushing more renters to home ownership.
In 2014, U.S. renters paid a collective $441 billion in rent, up $20.6 billion, or 4.9 percent, from 2013, according to a new report from Zillow, a real estate company. That translates to $26 more per month for the average renter. In some markets, however, the increase was far more. San Franciscans paid over 14 percent more in rent, while renters in Denver shelled out nearly 11 percent more. New York City area renters had it the worst, paying more than 10 percent of all the rent paid in the nation.
"Over the past 14 years, rents have grown at twice the pace of income due to weak income growth, burgeoning rental demand, and insufficient growth in the supply of rental housing," said Zillow Chief Economist Stan Humphries. "Next year, we expect rents to rise even faster than home values, meaning that another increase in total rent paid similar to that seen this year isn't out of the question. In fact, it's probable."
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