The average American shells out a staggering six-figure sum on rent before eventually purchasing their own home.
The typical renter in the U.S. spends a staggering $333,000 on rent. According to a recent study.
The running total includes average rent, utilities and other expenses such as renters insurance.
The figure is based on estimates from the National Association of Realtors (NAR) that indicate the average American rents his or her first apartment at age 22 and buys his or her first home at age 35.
The total cost includes spending an average of $241,000 on rent payments, $68,000 on utilities and $12,000 on moving expenses.
The typical renter in the U.S. spends a staggering $333,000 on rent and associated expenses.
The average cost of rent in the United States is down to $25,000 a year and just over $2,000 a month, according to a study by personal finance technology company Self Financial.
“In recent years, more and more households have had to pay rent,” says Sotheby’s real estate agent Nikki Beauchamp. He told fortune.
Being rent burdened is generally defined as spending more than 30 percent of income on housing.
The rise in rent-burdened young adults is causing more people to wait longer to save for a deposit or have children.
“These delays in household formation will result in people living as renters for longer periods,” Beauchamp explained.
However, the cost of a lifetime rent can vary greatly from state to state and city to city.
Those renting for just over a decade in Hawaii, the most expensive place to live as a renter, can expect to shell out $600,000, according to Self Financial.
On the other hand, in cheaper states like Minnesota, renting for the same period costs approximately $273,000.
Rent prices have risen steadily in the United States in the years since the pandemic.
Median rental prices are now 21 percent higher than they were in 2019, according to Realtor.com’s June 2024 rental report.
Rising home prices and mortgage rates over the same period have also raised the cost of buying a home.
Rents have increased by 21 percent since 2019
People are delaying saving for a deposit due to high rental costs.
Buyers now need to earn an average of $106,000 to purchase a home, up 80 percent from January 2020.
It’s not all bad news, however, as mortgage rates are falling, which could mean some housing markets will become much more affordable.
The average 30-year fixed mortgage rate has fallen to 6.46 percent, according to Freddie Mac’s latest data as of Aug. 22.
But experts say it could fall further, to 6.3 percent, in the coming months.
According to a new analysis from Realtor.com, monthly savings on home payments from lower mortgage rates would be enough to put a significant amount of additional housing within reach of the typical buyer in some major cities and former boomtowns during the pandemic era.
