Soaring Boston Beacon Hill Apartment Rents Make it Harder to Save for a Boston Condo for sale
If you’ve been paying attention to headlines (or your own Beacon Hill apartment lease renewal) then you’ve likely seen that rent is higher than it was a year ago. A lot higher.
Putting a larger share of your income toward a Boston Beacon Hill apartment rent is, obviously, bad for your finances in the short term. But it also creates rippling financial effects through your lifetime. One of the biggest consequences of higher apartment rent now is that it will take longer to save to buy a Boston condo for sale
If you were a renter in a big city during 2020, chances are you could land a pretty sweet Beacon Hill apartment deal, assuming, of course, that you kept your job through the onset of the Covid-19 pandemic. Many people were leaving cities like New York, and landlords were discounting apartments dramatically.
Now, that’s reversed. Many of the people who left are coming back, and those who moved in temporarily with their parents or other family members are looking for their own place to call home.
By the end of 2021, the number of renter households increased by about 870,000 compared with the first quarter of 2020, according to a report from Harvard’s Joint Center for Housing Studies. The overall rental vacancy rate had dropped to the lowest level since the mid-1980s.
That surge of new renters is driving prices up astronomically: Average rents were up 14% in December 2021 relative to December 2020, and multiple times higher than that in cities like Austin, Texas, New York and Portland, Oregon, according to real estate firm Redfin. The Federal Reserve Bank of New York expects the median rent to soar another 10% this year.
And incomes aren’t rising in tandem. Salaries only increased around 3% last year, on average.
If you’re paying more for rent, then you can’t save as much as you might have been able to for a down payment. But owning a home…