Rents rising faster than Nashville home prices

NASHVILLE, Tenn. (WKRN) – If you’re looking for a place to live, you might think renting is less expensive than buying a home. But one study suggests that may not be the case in Nashville.

Research from Clever, a real estate data company, shows that renting is cheaper than buying a home in most major US markets. Nashville is one of seven cities where rent growth has outpaced home price growth.

Since 2000, rents in Nashville have increased by 256 percent, compared with a 179% increase in home prices.

For renters moving to Nashville, apartment locators like Joel Sanders show customers sticker shock daily.

“Sometimes people have a budget close to $2,000 these days, and a lot of the time they can afford a bedroom. [apartment] and they had the one-bedroom option,” said Sanders, President and CEO of Apartment Insiders. “Now that’s starting to be more restrictive and those people are looking to find a roommate so they can get close to $3,000 two-bedroom in Nashville.”

What used to be a mortgage payment doesn’t even cut down on the cost of rent in Nashville today.

“People who can afford a $2,300 mortgage, now that you’ve included taxes and insurance, and you’re looking at your options for buying in Nashville because interest rates have gone up quite a bit lately. You don’t have much Sanders said.

As a result, the American dream of owning a home is being pushed back. It also creates a new problem.

“So those people are pushed into the rental market and they have the ability to buy a $2,300 apartment, and when there’s high-quality demand there, that’s one of the issues,” Sanders explained. The problem is driving up rents,” Sanders explained.

Researchers at Clever Real Estate found that over the past two decades, Nashville had the largest rent growth of all the major markets they studied.

“It is simply not sustainable. Cost of living increases and wages and salaries do not increase with the cost of living. Danetha Doe, economist at Clever Real Estate, said it would be more expensive to have the simple financial comforts that previous generations could afford.

Both Doe and Sanders emphasized wages have not kept pace with this soaring rent, or the historic inflation that the US is currently seeing. Research by Clever Real Estate shows that rents in the US are growing four times faster than wages.

Doe said: “I can say I am extremely nervous. “That means the money they bring in doesn’t go as far as it used to, whether it’s for groceries, for rent, for mortgage payments, for transportation. We all know that prices are also going up. And that is becoming difficult for families and individuals simply trying to make a living. ”

Doe added that people also don’t have money left to spend on extras, which has an impact on quality of life.

For renters moving to Nashville, Sanders said many are choosing between location, amenities and whether to split their rent with a roommate. Tenants are willing to drive to places like Columbia, Clarksville and Ashland City to find more affordable housing, he said.

Sanders expects rents to stabilize based on the number of apartments currently under construction, however, he said, it’s still too early to tell.

For more information on Clever Real Estate research, click here. Rents rising faster than Nashville home prices

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