Whether you’re browsing the local paper or using one of the many apartment listing apps out there, finding a decent place to hang your hat that’s also in your budget can feel like trying to uncover the the lost city of Atlantis.
Turns out, there’s a reason for that, according to a new analysis conducted by Zillow.
The real estate company used information from their database to analyze median rents in 15 major housing markets in the U.S., as well as the number of apartments built in the past 3 years. From this, they discovered the median rent for the least expensive third of apartments outpaced the overall rental market. Also, most new apartment growth is comprised of luxury units for wealthy renters.
In layman’s terms, there is growing demand for affordable rentals, but instead of meeting that need developers are focusing on adding to the supply of luxury units, pushing apartment rent prices higher across the board.
“We’re simply not building enough at the bottom and middle of the rental market to keep up with demand,” Svenja Gudell, Zillow’s chief economist, said in a press release. “As a result, these segments are becoming very competitive, as both new renters look to find their first place and existing renters get shut out of homeownership because of extremely limited for-sale inventory. Apartment construction at the low end needs to start ramping up, and soon, in order to see real improvement.”
By the Numbers
This is playing a major role in property affordability, according to Zillow, and is especially affecting lower-income Americans who are likely to rent. Below are the findings for the 15 cities Zillow analyzed.
Before Renting Your Apartment
As you search for your next place to call home, it’s important to remember that any potential landlord is probably going to look at a version of your credit report as part of your application. You may want to consider reviewing your credit before you apply so you have an idea of where it currently stands. (You can see your free credit report summary, updated each month, on Credit.com.) This will help you get a better idea of what terms and conditions you may qualify for on a mortgage, as well as if there’s any credit repair work you may want to do before applying for a new rental.