Nevada rent prices increase by 10 percent over last year, expected to rise
The cost of rent has increased 10 percent over the last year and is expected to rise, according to the Nevada Housing Division.
The median cost of rent in Reno and Sparks is more than $1,000 and prices are expected to go up by 4 percent in 2017, according to a builders update forecast.
CJ Manthe with the Nevada Housing Division says the increase in rent is due to a lack of inventory. Northern Nevada currently does not have enough rentals available for all of the people interested in renting, thus pushing the prices up.
Manthe also says wages are not currently aligning with the rental rates . Ideally, 30 percent of the household income would go to rent or a mortgage, which is not the case for many families.
"We are seeing a lag that the wages have not kept up with the increase in the housing cost," said Manthe. "What we're seeing is families that are rent burdened, meaning they are paying more towards their rent than that 30 percent. So that means it's harder for them to pay for essential living expenses."
Manthe says before the 2008 housing crisis, the homeowner rate in northern Nevada was 66 percent. Now, only about 55 percent of people own homes, with more choosing to rent.
The good news is housing projects are planned for the near future, which should help level out the rental rates.
"I think we will see a plateau, but I think it's just off a couple of years. With having 3,000 units in the pipeline, once we have more supply in our area, we will have more options, more choices, and we will see the rental rates temper," added Manthe.
The new construction should also help with the increasing population. According to a recent housing study by the Truckee Meadows Regional Planning Agency, the population of northern Nevada is expected to grow by 120,000 over the next 20 years. To accommodate the housing need for a growing population, northern Nevada would need to building 50,000 new units.
The Nevada Housing Division is working to help people rent or buy homes. For more information, click here.