Metro Area Renters Paid $8.1 Billion in Rent in 2014

By Nora Tooher

Philadelphia area renters paid a collective $8.1 billion in rent in 2014, an increase of 4 percent from the previous year, according to a Zillow report.

The Philly metro ranked 11th among the 50 largest metros in terms of the total rent paid out last year.

The New York City/northern New Jersey metro paid out the most in rent – a whopping $50 billion, which translates into $11 of every $100 in rent spent in the country, despite being home to only eight out of 100 renters nationwide.

Los Angeles area renters came in a distant second, spending $34 billion on rent, followed by San Francisco, $15 billion; Chicago, $14 billion and Washington, D.C., $13 billion.

Renters in Birmingham, Ala., spent the least amount on rent last year – $1.1 billion, ahead of Louisville, Ky., and Buffalo, N.Y., both at about $1.2 billion.

Nationwide, U.S. renters paid $441 billion in rent in 2014, up $20.6 billion from 2013 as both the number of renting households and the average rent rose nationally, according to Zillow.

Nationally, the total number of renters is estimated to have grown 1.9 percent in 2014, while the median rent paid increased 2.9 percent over the same period.

The Philadelphia metro Zillow Rent Index – the median monthly cost of all rentals – was $1,544 at the end of November, up $40 a month, or 2 percent from the year before. The median rent for the city of Philadelphia was $1,174, an increase of $98 a month, or 9 percent, on a year-over-year basis.

Over the past 14 years, rents nationally have grown at twice the pace of income due to weak income growth, burgeoning rental demand and insufficient growth in the supply of rental housing, the report noted. Rising rents have created economic challenges for tenants, especially those on entry-level salaries and would-be homebuyers trying to save enough to purchase a house.

Zillow is forecasting rents to rise even faster than home values this year.

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