WASHINGTON (AP) – U.S. home rental prices rose at a slower pace in October, a possible sign that apartment costs are testing the upper reaches of renters’ incomes.
Real estate data firm Zillow said Friday that median rents increased a seasonally adjusted 4.5 percent from a year ago. This marks a steady deceleration from annual prices gains of 5.3 percent in September and 6.2 percent in August. Zillow recently updated its methodology for averaging rental prices, showing that past growth rates were higher than previously reported.
Housing costs have consistently exceeded income growth. Average hourly wages rose just 2.5 percent over the past year to $25.20, according to the Labor Department.
Rents in metro San Francisco, San Jose, Denver and Portland, Oregon – areas that have attracted younger, educated workers – each rose by more than 11 percent from a year ago. But not all areas of the country are seeing dramatic escalations in rent. Between September and October, rents fell slightly in Chicago, Philadelphia, Detroit, Minneapolis, Baltimore and Pittsburgh, among other cities.
The median rental payment nationwide was $1,382 in October. That works out to roughly 30 percent of the median U.S. family income of $53,657, a level that the government has historically identified as being financially burdensome.