BEACON TRANSCRIPT – Although Americans seem to have been doing well financially speaking, rents are more expensive than ever and even rich people can barely afford them.
This week we found out that the middle-class is decreasing in numbers and that is good news as less and less people are having money problems. However, having money doesn’t necessarily help if you still can’t afford paying for rent. Not to mention that besides rent, you still have to pay the bills and to make sure you don’t starve.
For example, about 50 percent of the people who have an annual income of $30.000 to $45.000 spend an average of 30 percent of this income on their rent. The situation is naturally even more concerning for the ones who have lower annual incomes.
It looks like 80 percent of the people who earn less than $15.000 a year spend from 30 to 50 percent of their monthly income on rent. If we talk about individuals, they might manage to handle it. However, if we speak about families that happen to be supported by only one member or who earn together less than $15.000 yearly, than the figures are quite alarming.
Although families might get by with rents this high, the cutbacks they make could hurt the overall economy of their household or even their financial retirement plan.
To give you an example, last year for a newly built apartment you could have been asked to pay up to $1.372 or even more per month. This was the start of the rise of rentals’ prices, being approximately 50 percent more than the usual price.
The problem is also that although many newly built apartments are available, only 10 percent of them can be rented by people with an annual income lower than average. The demand has been increasing in the past 10 years but it doesn’t come only from the wealthy but also from people with lower incomes.
So, what are they supposed to do? Firstly, they should lower their expectations. Developers cannot ask less money for the luxury apartments they’ve built. We can now hope that they will understand the need for lower-priced rents and whether they start developing less luxurious apartments or just take down the prices a notch, it remains to be seen.
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