Most people are waiting for the next big recession to hit, and if history has taught us anything, it’s bound to happen. With all eyes on the potential of a stock market crumbling to bits, it’s hard to overlook a silent (but increasingly worrisome) storm on the horizon.
Whether it’s due to the taboo nature of the subject or due to the fact that you might not really know what your neighbors are facing, the truth is that most citizens of the United States are totally ignorant of the eviction crisis gripping small towns and cities alike.
The Eviction Rates Are Skyrocketing
Eviction rates have been steadily climbing for years—and now, it’s getting to the point that it’s becoming a serious concern. The average price of rent is now 66% more than it was in 2000—despite wages staying the same. Due to the rising rent rates, around 2.3 million Americans faced eviction in 2016. By 2018’s end, that annual number could easily top 3 million.
Rent is just too high for families to afford anymore. Around 1 in 4 Americans spend more than 50% of their income on rent, with some areas actually having typical expense rates higher than 60% of a total paycheck. An additional 20.3 million people spend more than 30% of their income on housing.
Why Is Housing Getting So Unaffordable?
The long and short of it is, investing. Rents are rising because more people are beginning to invest in real estate—which in turn, drives up housing prices.
You might have noticed that the demand for luxury rentals doesn’t match the number of renters that can afford it. Many high-end homes aren’t even inhabited; people are buying up real estate as a way to park their cash.
Foreign investors, in particular, have been known to keep houses vacant after buying them. Since they aren’t relying on rental income to make a building profitable, and since it’s a way to park cash, prices can’t correct themselves naturally.
But Wait, It Gets Worse!
Slashed budgets for public housing are also a contributing factor. By not having government-funded housing available to groups in need, housing pricing quickly tends to spiral out of control.
With no help from government agencies and rent rates rising spectacularly, there’s no way for some people to avoid homelessness. Evictions are the result.
Why is no one saying anything?
It’s hard to say. Part of it is due to the stigma that evictions have. Part of it is due to the fact that the US government only recently started tracking eviction rates.
And, still, more of it could be due to the fact that people simply do not want to admit they may be facing eviction themselves.
It will get worse before it gets better.
This practice is not sustainable in the long term. Eventually, something will have to burst. You can’t have an entire country filled with homeless people, nor can you have entire cities filled with vacant rooms.
The housing bubble is real, and once rent prices pop, it’s going to get very ugly.