Many higher-earning households in the US prefer staying in rented houses. The households making more than $150,000 in Austin, Texas, have surged by 154% in 5 years. However, the higher earners who are living on rent in other cities of the US have not seen a major surge.
In today’s latest world news from BNN, the median income of all households in 2021 was $71,000. Around 44 million households in the US still reside in rental housing. Cities in the South and Southwest, such as Phoenix, Atlanta, and Nashville, Tennessee, also witnessed a big increase in renters after several high-paid employees relocated to the region during the onset of the coronavirus.
Higher home prices and inflated mortgages
In recent years, Americans earning $150,000 have been rising significantly. However, higher earners in the US are unable to buy a new home because of higher home prices and increased mortgage rates. People from affluent categories could not find a home that met their expectations. Therefore, such people decided to stay on rent in a new city before deciding on what to buy.
Developers focus on building single-family homes
It creates an opportunity for real estate companies in the US to invest in buying homes in the suburban regions and offer them on rent to higher earners. Amenities-packed buildings are a hot commodity for apartment developers, who cater to the needs of higher-wage professionals. The developers are focused on constructing single-family homes for rent rather than making them for sale.
Creates difficulty for middle- and lower-income categories
A researcher at Harvard University, Whitney Airgood-Obrycki, said the rental market is becoming more attractive and competitive as developers prefer renting homes to a relatively affluent category. She further claimed the influx of professionals earning higher sums is making the lives of middle- and lower-income earners more difficult because they could not afford to pay higher rents.
The prices of rental homes have cooled down in recent months. Several people still prefer rental homes because of the unavailability of homes for outright purchase and higher home prices. These factors prevent further slashing down of rentals and offer incentives for house developers in the US. The landlords are offering their homes for rent to higher earners and said they may not need to lower rents.
Higher rents are here to stay
AHV Communities is engaged in the construction of single-family houses on the West Coast and the South. The CEO of AHV, Mark Wolf, said rents will prevail at existing rates. The average household income for the developments of AHV in locations near Seattle is over $200,000.
In the most recent USA news, those moving to new cities usually stay in rented homes for one or two years before deciding to buy a home. However, some higher earners who recently relocated want to stay indefinitely in rental homes. A 35-year-old entrepreneur, Al Hughes, who relocated to San Antonio with his wife after selling his home in Nantucket, Massachusetts, in 2022, could not find a place of their choice. He took a new house on lease for a monthly rental of $2,400. The facilities in this house are a two-car garage and a backyard. The monthly rent also includes a landscape fee.