US Cities rents almost up 5% in 2014

Americans paid out $20.6 billion more in rent in 2014 compare to 2013 as countrywide average rents in cities increased during the year, new data shows.

Cumulatively, they paid $441 billion in rent in 2014 compare to $420 billion last (2014) year, an increase of 4.9% as both the number of renting household and the average rent rose, according to an analysis from real estate firm.

In California the Bay Area, consisting of the San Jose and San Francisco metros, saw the largest jump in cumulative rent paid in 2014, up 14.4% and 13.5% respectively. Rent per household in the San Jose metro rose by $197 per month, while rent in the San Francisco metro rose by $163 per month.

The top fifty largest US metro areas, the largest amount of cumulative rent was paid in the New York/Northern New Jersey and Los Angeles metros at $50 billion and $34 billion respectively. 

The least amount of increasing rent was paid by renters in Birmingham, Alabama, at $1 billion, Louisville, Kentucky at $1.2 billion and Buffalo, New York at $1.2 billion. 

Nationally, the totality number of renters is expected to have grown 1.9% in 2014 and over the same time period, the median rent paid increased by 2.9%.

Over the last 14 years, rents have grown at twice the pace of income due to weak income growth, growing rental demand, and inadequate growth in the supply of rental housing, said Zillow chief economist.

This has created real opportunity for rental housing owners and saver, but has also been a sour pill to ingest for tenants, mainly those on an entry-level salary and those would-be buyers stressed to save for a down payment on a home of their own.

Next year, we expect rents to rise even quicker than home values, meaning that another increase in totality rent paid like to that seen this year is not out of the question.