Why is rent so high in America?

Question

is it greed?

Answer 1

It's always been a function of real estate values. Typically 9% rent per year is the total value of the property.

Most local property taxes go towards local education, - which is farce and a crime, - in-and-of itself.

Go to Tokyo for even higher prices.

PS. I guess greed is when YOU don't want to part with YOUR money, -when others are asking fair-market value.

Answer 2

I think it is greed. Where I live the rent is ridiculous and it goes up every year. It's said that the reason the rent is so high is because of the location. It's a good suburban neighborhood, and there are a lot of shops and businesses near by. Still the apartment is very small and not that modern, ( no garbage disposal, no vent above the stove and it gets really cold in the winter, due to poor insulation). People move out all the time because they can't afford to live here after awhile. It sucks, but yes, I think it's greed!

Answer 3

NO, it's just capitalism. All jokes aside, here is the real reason. At the moment, there is high inflation rates resulting in high interest rates. This means that the interest rates on mortgages are very high at the moment and a lot of people with average wages cannot afford it.

So, many people are being foreclosed and many others are selling their homes and opting to rent instead. This has drastically increased the demand for rental properties, not to mention the other disasters like Hurricane Katrina etc. Due to high demand for rentals, prices of rent has increased because there is a short supply for rental properties, but high demand for them. It is all about the economy/economics, not greed.

Answer 4

Not necessarily....America is a free economy. People can charge what ever the market will bear for their products and services. When taxes, insurance and real estate prices go up you can expect rent to increase as well. With inflation the cost of occupancy must increase or the landlord loses money. Not greed, just good business.

Rent is not high in all of America. The same apartment that costs $1500.00 in Southern California will rent for $600.00 in Macon, Georgia. It just depends on which housing market you are in.

Answer 5

Rents & Mortgages are subject to the law of Supply and Demand. The fewer units available - the higher the price and vice versa. In a free market system, if there are 100 apartments available and 200 renters, rents will be high. If there are 100 apartments available and only 2 renters, rents will be low. The same is true when you look at buying property. If rents in your area are too high, you may be able to buy for close to or just under mortgage rates.

Answer 6

You are making the mistake of thinking "America" is all alike.
There are places where the median is $60,000, and there are places the median is $500,000.
It all depends on where you want to live, tradeoffs, etc.

So much money from the cost of a house if from taxes, that in my opinion, the greed is coming from the government, not the public.
All that tax money is added to the cost of buying the house, therefore it has to be recouped by renters, if the owner is renting.
Keep in mind that most rentals LOSE money the first couple years - they're actually charging LESS than what they're getting from rent.

If you add not only the property tax, school tax, etc., but all the taxes from construction, fees, permits, etc., and probably 50% of the cost of the house is the government taking the money.
So it's really their fault housing is so high.

Answer 7

No, it isn't greed. In the place where you live there is possibly a high demand for living spaces which may be short in supply. So the property owners can charge "high" rents because they know that many will lease their properties anyway. Good businesses thrive in America where there is free market.

Answer 8

HERE IT IS: Supply and Demand!! More people are Renting due to mortgage rate increases. Therefore the demand is high so the price increases. When people start buying again the demand for real estate will increase.. so will property values... and rates will drop again.... causing rent prices to drop as well. I am an account executive with a very successful mortgage company. This is how it has always been. We as consumers determine the value of things and what we expect to pay... and that determines the market.

Answer 9

Depends on where you are, east and west coast are high, but mid-west and Texas are cheap. That other answerer was right, it simply supply and demand. As the east and west coast real estate markets bubble, rent will go down because there are more renters. Here in Texas, we are not anywhere near a real estate bubble, so rents are fairly firm.

Answer 10

No. It is supply and demand. Rents in one area may be quite high, while in others it can be lower. Just like a house in the midwest may cost 150,000 while that same home in a major city like San Francisco could cost 5 times as much.