Wage hikes outpace rent hikes in some parts of the country
Wage hikes outpace rent hikes in some parts of the country
We’ve been talking about inflation a lot these days, about the many goods and services that are going up in price. According to ATTOM’s 2022 rental affordability report, which came out Thursday, one of those categories is housing.
Both rents and home prices ticked up in 2021, which anybody involved in those markets can tell you.
But there’s a very important detail in the rental report: Wages are up too. They’re actually outpacing rent increases in much of the country — but not everywhere.
In Boise, Idaho, the cost of housing is a lot higher than it was when I was growing up there. Since early 2020, home prices and rents have increased 30% to 40%. Boise is one place where housing costs and wages are not rising in sync.
“No wages are going to go up that much. It just doesn’t happen that quickly,” said Todd Teta, chief product and technology officer with ATTOM Data Solutions. Still, he said, it’s a different story nationwide.
“Wages did grow nicely in a lot of parts of the U.S., right around 8% on average,” he said.
But that growth has been driven by pandemic-caused labor market weirdness. It’s usually the other way around, according to Alicia Mazzara, a senior research analyst with the Center on Budget and Policy Priorities.
“You have this long-standing, historical trend, right, of rent rising faster than renters’ incomes,” she said.
Since 2001, Mazzara said, rents have gone up by 15% adjusted for inflation. Whether renters can make up that gap partly depends on where they live and whether their raises are substantial enough.
In Burbank, California, video game programmer Elan Ruskin’s raise was not.
“This year, my rent went up 5%. And the wages went up just over 2%,” he said.
Ruskin would like to buy a place. But that might make more sense if he leaves California for a part of the country — like the Midwest or the South — where, according to ATTOM, it’s more affordable to buy than to rent.
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