Calling all current and potential renters: Before you make your next move, you’ll want to read this first. A new real estate market report from Zillow reveals that rents across the country are rising faster than they have in the past two years—and some US cities are experiencing steeper price spikes than others.
According to the study, the national median rent has risen almost three percent in just the past year, to a cool $1,445 per month. However, some metro areas—mainly popular tech and finance hubs along the West Coast—are becoming increasingly less attainable for non-homeowners. For the seventh month in a row, Sacramento has topped the list with the fastest rental growth (the average rent there is now $1,849 per month). So, what’s the deal?
“For-sale inventory is tight, and with home prices continuing their rapid climb, it’s becoming more and more difficult for renters to become owners, forcing them to rent longer than they otherwise would have,” says Zillow senior economist Aaron Terrazas. “Searching for the ‘right’ home has become a drawn out affair, and rising prices require more savings for a down payment. Were it not for strong new apartment construction over the past half decade, rental appreciation would be even stronger than it is now.”
Here’s a peek at the five fastest appreciating rental markets:
- Sacramento, CA
- Riverside, CA
- Seattle, WA
- Minneapolis, MN
- Atlanta, GA
Are we at all shocked to find two California cities at the top of the list? Of course not. Time and again, the Golden State has been dubbed severely unaffordable—for home buyers and renters alike. Just last fall, the Los Angeles-Long Beach-Anaheim metropolitan area was named the worst place for renters. And not only does California carry the weight of having the least affordable housing market in the world, but a new study has also ranked it the worst state for quality of life (taking into account factors like drinking water, community engagement, and air pollution).
Despite speculation that poor air quality or a lack of social involvement may be affecting the long-term wellbeing of local residents, people continue to flock to California—and we can’t really blame them. Dreamy coastal views, breezy year-round temps, and endless sunshine are three reasons alone we’d pack up and head west. Much like with Seattle (2018’s third hottest housing market), high-paying tech jobs continue to draw new residents to the coast—and consequently, drive up mortgage and rent rates for everyone else.
The housing struggle is officially real. So, what’s a budget-focused renter to do in times like these—when living in your dream city, never mind living alone, is essentially impossible? Here are three possible ways to cope:
Consider if buying is the way to go.
Yes, buying real estate requires a huge chunk of cash, and not everyone has the ability or means to save up for a down payment. That said, purchasing property might be the way to go if you’re looking to nail down a solid investment and have a more permanent place to call home. It really all depends on where you’re looking to buy.
Under-the-radar, mid-sized cities with strong value appreciation and smaller average down payments like Tampa, FL, Indianapolis, IN, and Houston, TX have been ranked by Zillow as the top best cities for first-time homebuyers. Ohio, Iowa, and West Virginia have also been dubbed budget-friendly markets for home-buying millennials, in particular.
That said, homeownership is a huge commitment, and it’s not necessarily for everyone. While some consider renting as good as throwing away money each month, there are some major upsides to renting—from having the time and freedom to save up for a down payment (or literally anything else) to test driving a new neighborhood.
Roommates, roommates, roommates.
The golden rule of saving money on rent? Roommates! Across the US, more and more working adults are opting to live with friends, strangers, or their parents in order to cut costs and living expenses. If you live in any of the metro areas listed above, or in a notoriously expensive city like San Francisco or Chicago, sharing isn’t just caring—it’s practically inevitable. Riverside, CA, uncoincidentally, is one of just a few areas that are experiencing a serious spike in double-up households (or households where two or more working-aged adults live together, but aren’t married or in a relationship).
Whether you’re interviewing potential new roomies (peep our must-ask questions here) or divvying up rent accordingly, living with other people is hard—so make sure it’s the absolute best option for you beforehand.
Live somewhere that’s a good fit for your profession.
Sometimes, finding the right place to live simply comes down to your career goals. Whether you’re about to graduate from college or are currently in between jobs, narrowing down your search to a city where you’ll likely find the most opportunities (and hopefully a higher salary) is key.
Consider yourself the hands-on type? Pittsburgh, PA and Dallas, TX are two current hubs looking for more full-time bartenders, carpenters, and engineers. Or if you’re more of a health nut, you’re more likely to find suitable healthcare jobs—and a six-figure salary—in Birmingham, AL and Cleveland, OH. See our full list of the best US cities to live in according to your job here.
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