Here Is The Average Cost To Rent A 2-Bedroom Apartment In Your City

Tyler Durden's picture

We have been pounding the table since 2009 that without a sustainable increase in average disposable income, the US housing market - that core driver for "wealth effect" and net worth for the "rest of us", i.e., those non-1%ers whose net worth is not tied up in various rigged, manipulated capital markets - will never recover, and as a result, neither will the US economy.

Four dead-cat bounces, and yet another fading bubble in home prices later, this has again proven accurate, with the percentage of Americans owning houses dropping to levels not seen in 19 years.

 

The inverse, or the percentage of Americans renting, promptly manifested itself, and is essentially a mirror image of the chart above.

 

To be sure, the logical tradeoff to unaffordable housing, one which also was expected from the beginning, and has manifested itself quarter after quarter, is a relentless increase in median asking rents to new monthly record highs across the nation...

... and especially in the northeast.

 

Ironically, the rental price surge, one which the CPI calculation stubbornly does its best to ignore, is taking place even as median rental income is the lowest it has been in over two decades.

 

But what is even more surprising is the clear dispersion among socioeconomic...

 

and ethnic classes...

 

... when it comes to a propensity to rent, suggesting that the marginal renter is increasingly the most financially challenged, which in turn also begs the question: how much longer can rental prices keep rising?

Still, as Mother Jones notes, "With more people trying to get into same number of units you get an incredible pressure on prices," says Shaun Donovan, the former secretary of housing and urban development for the Obama administration."

And yet, surely there is a limit to how far the average American can be pushed: today, half of all renters pay more than 30 percent of their monthly income in rent. For 28 percent of Americans, some 11.3 million, more than half of their salaries go toward rent!

One thing is clear: until there is a reason to reverse the own-to-rent trend, one which will not appear until median consumer incomes resume growing for all, not just for the uber-wealthy, this trend will continue until finally Americans are priced out of not only owning, but also renting.

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So with all that said, and with record rental expenses already forcing millions of Americans to have far less disposable income (hint to the econogeniuses in Princeton: if tens of millions have to spend the bulk of their income on rent, that means there is far less disposable income left for everything else, which also precludes benign inflation from appearing... not to be confused with hyperinflation from monetary debasement) for everything else once the monthly bill for the roof above one's head is paid, here is a breakdown of 25 selected US metropolitan areas, ranked from most to least expensive, how much it costs to rent a two-bedroom apartment (one can only assume the $1,440 price listed for New York is based on some non-GAAP, magical numbers that exclude reality).