As rental prices keep going up, fewer renters are making the switch to owning a home. Many people renting homes are spending more on their living expenses. This higher cost of renting means they have less money to save for something important, like a future down payment on a house. A recent report by Zillow shows that fewer renters think they’ll be able to buy a house within the next year, which might slow down the recovery of the U.S. housing market.
This decade is expected to see a significant rise in the rental market, mainly because many millennials are starting their careers. Researchers at Harvard’s Joint Center for Housing Studies highlight this trend. While higher rents are good news for landlords, many workers are seeing a large part of their income going towards rent. In fact, rent increases in 2014 were double the rate of inflation, making it even tougher for renters to save money.