WASHINGTON — U.S. home rental prices climbed much faster than incomes in June. But there are signs of slowing momentum around major job hubs such as New York, Los Angeles and Washington.
Real estate data firm Zillow said Thursday that U.S. rental prices rose a seasonally adjusted 4.3 percent in June from a year ago. Rental prices have been increasing at double the pace of wage growth, causing renters to allot more of their income to housing and limiting their ability to save to buy a home.
The average hourly wage increased just 2 percent last month, according to the government.
“Rents are insanely unaffordable on a historical basis in the United States right now,” said Stan Humphries, chief economist at Zillow.
Rents continue to jump at double-digit rates in Denver, San Francisco and San Jose, Calif. But the monthly data suggest that several other major markets have either added enough new buildings to accommodate demand or have pushed residents to their financial limits.
The slowdown is reflected in price changes month over month.
Between May and June, median rental prices in the New York area fell $15 to $2,340 a month. This comes as rent consumes on average 41.7 percent of incomes for people living in and around New York, up from a historical average of 25.3 percent, according to Zillow.
The median rental price around Los Angeles has risen more than 5 percent over the past year, but it was flat at $2,505 from May to June. The monthly costs approach nearly half of Angelenos’ incomes.
The Census Bureau reported this week that the share of homeowners dropped to its lowest level since 1967. Only 63.4 percent of Americans owned homes in the April-June quarter.
