While the average rent paid by families across the country increased in 2016, the amount of that increase was not overly excessive according to apartment finding company ABODO. According to their data of over one million one bedroom apartments, the average rent nationwide was $1001 per month, which is less than a 1% increase during the year. However as we state below, the federal government CPI rates show there was a much larger increase during 2016 (but the data sets differ).
No matter which data set is looked at, $1000+ in monthly rent expense is still very high. This can lead to an increasing number of families (especially the so called “working poor”) to seek help. As if something goes wrong in their monthly budget, and if they miss one or more paychecks from their job, the chance of an eviction runs very high. Therefore any tenant that may need some financial help can find assistance for paying rent from a number of charitable and government programs.
2016 increases by city and region
As was to be expected, the increases vary widely depending on the state and city. In fact, the average rent paid decreased in 6 states….so “only” 44 states had increases according to ABODO. But the Labor Department shows a much higher percentage of states where families faced increases. The cost of real estate (whether buying a home or leasing an apartment) is very local, and this focus on local markets is one of the factors that lead to either an increase or decrease in 2016. Still, we were surprised that the average increase was under 1%, which is less than the current rate of inflation.
ABODO reports on local as well as national trends. In fact, they have data which shows the 10 cities with the highest average increases in 2016 as well as decreases. Many residents of these regions may fall behind and need help sooner than others. The 10 cities with the highest average increase in monthly rental costs are as follows. (It is harder to get Labor Department data by city.)
Columbus Georgia – 5.5%.
Philadelphia Pennsylvania – 4.2%
Raleigh North Carolina – 3.8%
Long Beach California – 3.8%
Scottsdale Arizona – 3.7%
Winston-Salem North Carolina – 3.1%
Indianapolis Indiana – 3.1%
Fort Wayne Indiana – 2.9%
Nashville Tennessee – 2.8%
El Paso Texas – 2.7%
Some of those 2016 increases are fairly large, and individuals may need help in trying to keep up. In general, families in those cities will have had a larger increase in their rent charged by their landlord than they did an increase in their wages. As the average monthly income paid by employers in 2016 increased less than 2.7%. And if you were to use the Labor Department data, almost every person that leases had a much bigger increase in their rent that would have more than offset any wage gains.
When trying to determine what may or may not have happened to the price of leasing a home in 2016, be sure to take into account all sources of data. As there are conflicting reports out there. The data on rental costs according to ABODO shows less than a 1% annual increase, however the Labor Department Consumer Price Index (CPI) states that monthly rental costs increased by 4% throughout 2016. So this would mean that not just 44 states had increases, but all 50 would have! So these are very big discrepancies, and other data providers will show differing information as well. Find the original ABODO data here.
Note that ABODO does report on 1 bedroom apartments, and some other providers (such as the Labor Department) will use a larger sample size for their CPI data. But the point is that anyone that leases a home should expect their bills to continue to increase throughout 2017. So please budget properly, and be sure to save some money in case a hardship comes up.