It’s difficult for young Americans to rent a house like never before

After graduating from Michigan State University (USA), Waleed Huwio moved to New York to work. He shared with 2 friends in an apartment $1,250/month to have a separate bedroom.

Huwio said that thanks to accepting to live together, he did not have to pay too much money. However, the landlord required his group to prove enough money to buy the house outright. This is a very large amount, the group cannot guarantee their meager salary.

Huwio doesn’t even have a guarantor – responsible for paying the rent in case he can’t afford it.

Rents in the US are growing faster than wages. Illustration: The New York Times.

At this time, the guy was forced to find a service company for support. Accordingly, this company acts as a guarantor, helping him complete the contract. They charge the equivalent of a month’s rent, in addition to a few other currencies throughout the service life.

And for Huwio, this amount is not small.

“Fresh graduates like me have a hard time finding a convenient place to live. The rent is already expensive, we have to pay more for the service. I just want to save as much as possible,” Huwio told WSJ.

Starting salary is not enough to rent a house

Young employees in the US are having high requirements for salary and benefits. The National Association of Colleges and Employers said many businesses plan to raise wages for young workers, including fresh graduates.

In its latest figures, the association says graduates in 2020 have an average starting salary of about 55,000 USDper year, up more than 14% from the average about a decade ago.

However, despite rising wages, young people are still in the midst of an unprecedentedly difficult and expensive rental period.

Young people accept to share with strangers to reduce rental costs. Illustration: The New York Times.

According to the rental platform Apartment List, the average apartment rent in the US increased by more than 16% in the past year and increased by 28% compared to January 2017.

Many American experts believe that each person should not spend more than 30% of income on rent. But rents in some areas with convenient transportation have exceeded this mark (if compared with the average income of young workers).

Specifically, the median rent for a one-bedroom apartment in Nashville is currently 1,264 USD/month, accounting for about 28% of the average income before tax.

“Rent prices are skyrocketing,” said Chris Salviati, economist at Apartment List. New graduates or young people in the labor market are having a much harder time than the same group of people a few years ago.”

A 2019 analysis of apartment rental platform HotPads showed that over the past decade, rents have always been higher than young people’s initial income.

A fresh graduate can’t afford a budget apartment in 50 major cities across the country at all.

Increasing demand for shared accommodation

In the context of high rents, many young people accept to share. This helps them get a place to live at a more economical cost, convenient for public transport.

John Shriber, co-founder of roommate platform Roomster, said demand for roommates in the US increased about 40% in the past year, especially in vibrant cities like Nashville, Austin and Atlantai.

According to experts, young Americans are in a period of unprecedented difficulty in renting. Illustration: Andrea Piacquadio/Pexels.

As of the end of April 2022, Roomster only 338 rooms in the city of Austin advertised for roommates. Meanwhile, the number of people wishing to rent together is up to 1,756.

According to him, the average cost of finding roommates on Roomster has increased by 33% this year, reaching 948 USD/case. Usually, people pay 917 USD to find an apartment with a suitable housemate.

“Life has never been cheap, but things are much more expensive now than before,” Mr. Shriber said.

According to Zing