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Immigration See other Immigration Articles Title: Where Disposable Income Goes To Die: Since 1990 Real Rents Are Up 15% While Median Incomes Are Unchanged This means that all else equal, the average American has 15% less disposable income after factoring rent compared to 24 years earlier. And since the demand for rental properties will only go up as even parent basements are getting full, it means the already record high rent prices will duly follow, taking even bigger chunks out of US disposable income, and thus, that part of the US economy, some 70% of it, which depends on consumer spending. The beneficiary? The personal bank accounts of owners of rental properties... such as BlackStone - America's largest landlord. Sure enough, as WSJ confirms, "apartment landlords continued to push through hefty rent hikes in the second quarter, squeezing U.S. households that already are struggling financially after four years of steady increases." The average monthly rent for an apartment rose to $1,099 in the second quarter, up 0.8% from the first quarter, according to data to be released Wednesday by real-estate research firm Reis Inc. That was the 18th consecutive quarter of rent increases. For the 12-month period ended in June, rents rose 3.4%. No, it's not just a New York phenomenon. It's everywhere: Effective rents—which tend to be lower than asking rents—were up in all 79 U.S. metro areas tracked in the Reis report. West Coast cities that have been the model of recovery continued to top the list of highest rent growth for the quarter and over the past 12 months. Rent growth exceeded 6% over the past year in San Francisco, San Jose and Seattle. Even cities that aren't normally associated with fast rent growth, such as Charleston, S.C., and Nashville, Tenn., posted strong growth over the year, up about 5% or more for the year. To some, renting as the new owning is equivalent of a recovery: "You have definitely seen that recovery now spread to all of the major markets around the country, even if some of them were laggards," said Ryan Severino, an economist at Reis. "It's a very pervasive recovery." Actually, what it is, is a pervasive confirmation that the Old Normal American Dream is over. As for the new one, renting, even that will soon be out of the reach of most. Economists said the growing demand for rental housing partly reflects changing preferences among younger renters, who tend to prefer urban areas. But the demand for rentals also reflects tight mortgage-lending standards that have shut out potential homeowners from the market. "If you can't get into a single-family house and you can't get a mortgage, well, you don't need a mortgage to get an apartment," said Stephanie Karol, an economist at IHS. But household incomes have stagnated, resulting in a financial squeeze for a growing number of renters. Median household income was $50,017 in 2012, below 2007's peak level of $55,627, after adjusting for inflation, according to U.S. Census Bureau data. So what is the alternative? Well, just "charge it"... as increasingly more Americans are doing, and as the subprime lending bubble of the 2007 period is meticulously recreated, one can say with 100% certainty that the consequences will be identical. Poster Comment: Immigration is sending rents up and also unemployment. Post Comment Private Reply Ignore Thread
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