Seattle rent hikes unsustainable, up 32 percent since 2009
Mar 17, 2015, 9:51 AM | Updated: Oct 10, 2024, 1:59 pm
Rental housing and apartment rates in Seattle have leaped nearly one-third since 2009, widening the gap between rental costs and household income to an unsustainable level, according to a new study released by the National Association of Realtors.
NAR evaluated income growth, housing costs, and changes in share of renter and owner-occupied households over the past five years in metropolitan statistical areas across the U.S.
Over the past five years, a typical Seattle rent rose 32.38 percent compared to the national average of 15 percent. The income of renters grew by only 11 percent, according to NAR research.
“The gap has worsened in many areas as rents continue to climb and the accelerated pace of hiring has yet to give workers a meaningful bump in pay,” said Lawrence Yun, NAR’s chief economist.
Seattle, New York and San Jose are among the cities where combined rent growth far exceeds wages, according to the survey.
“Current renters seeking relief and looking to buy are facing the same dilemma: Home prices are rising much faster than their incomes,” said Yun. “With rents taking up a larger chunk of household incomes, it’s difficult for first-time buyers – especially in high-cost areas – to save for an adequate down payment.”
Meanwhile, those who were able to buy a home in recent years have been insulated from the rising housing costs since they were able to lock-in a low 30-year fixed-rate mortgage with a set monthly payment, according to NAR’s study.
The markets that have seen rents rise by the highest amounts since 2009 are:
- New York: 50.7 percent
- Seattle: 32.38 percent
- San Jose: 25.6 percent
- Denver: 24.14 percent
- St. Louis: 22.26 percent
“Many of the metro areas that have experienced the highest rent increases are popular to millennials because of their employment opportunities,” said Yun.
The key to relieve housing costs: Builders need to ramp up the supply of new-home construction, according to Yun. He estimates that housing starts need to rise to 1.5 million. Over the past seven years, housing starts have fallen far short from that historical average – averaging about 766,000 per year.
