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Rental crisis

Though Hotte doesn’t think she’s getting a good deal on her $2,000 apartment, Rent.com’s most recent numbers suggest that the commenters might be right.

The median asking rate for an apartment in Connecticut is $2,368. The state has seen a particularly bad year-over-year rent increase at 6.22%.

Across the U.S., rents have risen a median of 0.77% from March 2023 to March 2024, according to Rent.com.

But since the pandemic began in 2020, rental prices skyrocketed 29.4% — an average of 7% per year, according to Zillow’s January numbers. Most of these increases occurred in 2021.

As one commenter put it: “The rent we are expected to pay in this market is crazy.”

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Wages can’t keep up

Hotte says that she’s thankful she has someone to split the $2,000 per month rent.

“That [$2,000] is my whole entire monthly paycheck for rent,” she says. “How in the world is somebody supposed to ever live on their own anymore?”

The median wage for an American worker is a bit more than what Hotte brings in, at $4,556 per month, according to the Bureau of Labor Statistics’ most recent numbers.

Unfortunately, that’s still not enough to afford a $2,000 a month place by yourself, if you want to stick to the rule of thumb of spending only 30% of your monthly income on rent. Even at $4,556 per month, you could only afford $1,366.80 per month.

You would need to make $72,000 a year to be able to keep your $2,000 rent within that 30% of your income range. This is much higher than the median salary for an American worker: $54,672.

As Hotte points out, this isn’t just a personal finance matter, it can also become an issue for finding housing when certain rental agencies and landlords require that your paycheck be able to cover 30% of the rent. They will often require you to have a co-signer or roommate to make up for that loss.

Will rent ever go down?

Though rent is high, prices are slowing down — especially in certain markets. States like Florida and Oregon have seen 8.80% and 5.38% decreases in rental asking prices since March 2023, according to Rent.com.

“It seems both tenants and housing providers are adjusting to a more balanced market, where rent growth is consistent but not as aggressive as before,” Emily McDonald, Zillow’s rental trends expert, told Architectural Digest in January.

With high housing prices and mortgage rates, renting has become a more viable option for many Americans. Even wealthier Americans are now ditching their homes for rentals because they just can’t “stomach” the thought of spending hundreds of thousands of dollars on a small home.

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Sabina Wex is a writer and podcast producer in Toronto. Her work has appeared in Business Insider, Fast Company, CBC and more.

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