Numerous articles have noted a sharp rise in the price of renting an apartment or house across the U.S. Many have also argued that the rise in rents disproportionately affects lower and middle class renters.
I know in my own situation, my rent increased 9% in 2013 and 10% in 2014. Did our incomes increase by as much? I wish.
Houseofdebt.org decided to take look by examining the great data available on rents from Zillow.
The chart shows general inflation (measured with PCE headline inflation) versus the increase in rents. Both series are indexed to be 100 as of November 2010 (the first month the Zillow data are available).
The pattern is undeniable: rents are rising much more rapidly than other consumer prices.
The Fed may be emphatic that we're not experiencing inflation but when it comes to housing, there's no denying the facts. Gas at the pump has doubled since 2008 (isn't it convenient they exclude food and energy), food prices have crept higher but portions and package size have shrunk (remember when a 24pk of Coke was $4 or a 2-liter was .99 cents. Now a one liter is .99 cents) and now rents continue to surge. More and more young adults are living with Mom, Dad and Grandma......and even apartments are now becoming too expensive to the lower classes.
Good thing the stock market and Corporate profits are at all time highs. The rest of the U.S. is drowning. The income gap continues and the winners are clear.