Rents are rising. We hear about it on the news and around the water cooler. The primary reason is that the millennials are moving out of their parent's homes and looking for a place to live. There is a shortage of new rental inventory.
This is also exacerbated by the fact that more and more of the country is renting and landlords have the power for the moment.
In the last year, rents have grown about 1.2% according to Apartment List. While that seems small, landlords are rounding up, adding an extra $100 to $200 onto rents when they have an apartment open.
The Rent Trap
The rent trap happens when renters are paying such a high percentage of their income to rent that they can't afford to save up for a down payment.
According to most reputable sources, your housing should cost about 30% of your income. For some renters, they are paying 50% or more. That would leave nothing behind for a down payment.
How To Get Out Of The Rent Trap
It can seem nearly impossible, but you can get out of the rent trap. There are many, many programs that let you purchase a home with little or no money down. Furthermore, there are programs that will allow you to move your rent payments to mortgage payments. This can mean that you're growing your equity at the same pace that you were growing your landlord's.