HAMPTON ROADS, Va. – We often hear about home sale prices, but a new study shows that half of American renters are spending more than 30 percent of their income on rent and utilities.
A report from the Harvard Joint Center for Housing Studies found that the number of renters, considered to be “cost-burdened,” in 2022 was up two million from three years prior.
Professor Simon Stevenson is the Robert M. Stanton Endowed Chair of Real Estate & Economic Development in the Strome College of Business at Old Dominion University.
He states, “While rents have risen a lot in larger properties, they are generally speaking less than what you'd be paying on a mortgage loan; that is why those households are currently renting rather than buying. The more pressing problem seen in some areas of Hampton Roads, especially on the Peninsula, is a lack of houses to rent.”
Stevenson said this is in line with the bigger picture related to home sales.
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“Many people who financed at low rates a few years ago are reluctant to move unless they absolutely have to, as they could be refinancing at far higher rates. This means that Hampton Roads, like many U.S. markets, has seen inventory reduced and that reduced supply has meant that prices have largely stayed steady rather than fall," added Stevenson.
Inflation is frustrating for some when it comes to rental prices. Katrina Smith is a teacher who’s renting a two-bedroom duplex in what she describes as a working-class neighborhood.
“After deductions, taxes, and all those other items, I’m spending 50% of my income just on rent,” she said. “That’s not including necessities like water, electricity, phone bill.”
Professor Stevenson said this trend can have long-lasting consequences.
“It’s not just the reduction in their disposable income. It’s that it’s going to inhibit their ability to save for that down payment when they do look to buy a home for the first time,” Stevenson explained.
He added that while it’s not an easy decision, renters should look at all the options such as a longer commute versus paying higher rent.
On March 13, ODU will be hosting an event called Hampton Roads Real Estate Market Review and Forecast. Local professionals in the field are invited to hear the latest trends impacting the real estate market in Hampton Roads.
Meanwhile, a bill in the Virginia General Assembly that would give cities the ability to regulate how much landlords can charge renters was just continued to 2025 by a subcommittee. The House bill would also require landlords to give at least two months warning of any rent increases.
