Rental Prices Increased Faster Than Inflation and Income for 40 Years

By Kim Shindle | Aug. 2, 2023 | 2 min. read

Rental prices remain high throughout the country, rising exponentially since the pandemic. Rental prices have grown faster than inflation and income over the past four decades, according to research by Real Estate Witch, part of Clever Real Estate.

Rental prices escalating faster than income has forced many renters to spend a larger portion of their wages on rent. In almost half of the 50 largest U.S. cities, the rent-to-income ratio surpassed the national median of 20%. From 2020 to 2021, rent jumped 6% while wages grew 4.5%.

In fact, rents have increased 208% since 1985 compared to inflation, which rose 149%. If these rates grew at the same rate, the median U.S. rent would cost 19% less per month. Rent price growth first exceeded inflation in 2001, then the gap widened during the 2008 recession, coupled with the decade of underbuilding, which has led to today’s affordable housing crisis.

Pittsburgh was one of only four cities where the rent-to-income ratio declined from 2009 to 2021. Since 2009, rent has increased 42% in Pittsburgh. According to the study, in 2009, rent in Pittsburgh was $630, compared to 2021 where it hit $892.

In Philadelphia, rent has increased by 37% since 2009. In 2009, rent was $895 in Philly, compared to $1,230 in 2021.

In the Allentown/Bethlehem/Easton area, rent escalated 42% between 2009 and 2021, going from $803 to $1,141.

The Harrisburg/Carlisle area saw a 40% rent increase over the same period, with rent going from $726 to $1,019.

The Reading area had a 37% jump in rent prices, over the same 12 years, going from $718 to $985.

In Erie, rental prices went up 31%, rising from $599 to $787.

Rent prices have grown by 60% or more in seven U.S. cities since 2009.

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