Why Is It So Hard to Get an Apartment?
Uncover the complex reasons behind today's challenging apartment search, from market forces to financial hurdles and fierce competition.
Finding an apartment in today’s housing market is increasingly difficult. Many individuals and families experience frustration searching for suitable rental properties. Several factors contribute to this challenging reality.
Market Dynamics
The rental housing market is heavily influenced by supply and demand. Demand for rental properties has surged due to population growth. High home prices and elevated mortgage rates have made homeownership less accessible, pushing more individuals into the rental market for longer periods.
Conversely, the supply of available rental units struggles to keep pace with this rising demand. The construction of new housing, particularly multifamily units, has been slow, with permit applications dropping over 20% in 2023. Restrictive zoning regulations further limit supply by imposing requirements such as minimum lot sizes, height restrictions, and parking mandates, which can hinder the development of denser housing options.
Additionally, the conversion of long-term rental properties into short-term vacation rentals through platforms like Airbnb reduces the available housing stock for permanent residents. The aging housing stock across the nation, with the median age of rental properties being 44 years, also presents challenges as older units may require significant renovations or are not suitable for modern living standards, contributing to a tighter market. This imbalance between robust demand and constrained supply intensifies competition and drives up rental prices.
Financial Obstacles
Individuals seeking apartments face substantial financial barriers. A significant challenge is the rising cost of rent relative to income, known as rent burden. Nearly half, specifically 49.7%, of renter households spent over 30% of their income on housing costs in 2023, with the median rent consuming 31.7% of median household income in 2022. Households are generally considered cost-burdened if they spend more than 30% of their income on housing, and severely cost-burdened if they spend over 50%.
Beyond monthly rent, significant upfront costs often pose a considerable hurdle. These typically include a security deposit, which commonly ranges from one to two months’ rent, though some state laws may allow up to three months’ rent. Prospective tenants may also be required to pay the first and last month’s rent upfront.
Non-refundable application fees are also common, covering the administrative costs associated with processing an application. Landlords frequently impose income requirements, often stipulating that an applicant’s gross monthly income must be 2.5 to 3 times the monthly rent. This requirement can be a significant barrier for many, even those with stable employment.
Credit scores and credit history are also critical. Most landlords prefer applicants with a credit score of 650 or higher, while scores below 600 can lead to additional scrutiny or denial. A strong credit history signals financial responsibility and the likelihood of on-time rent payments. A less-than-perfect credit score may result in a landlord requiring a higher security deposit or seeking additional assurances to mitigate perceived risk.
Competitive Application Process
Even when applicants meet financial requirements, the non-financial aspects of the application process present additional challenges. The sheer volume of applicants for desirable rental units creates intense competition, requiring prospective tenants to act quickly once a suitable apartment is found. Many units are rented within hours or days of being listed, making prompt submissions essential. Landlords employ rigorous screening processes that extend beyond financial checks to assess an applicant’s reliability and suitability.
These screenings often include comprehensive background checks, reviewing criminal history and eviction records. Landlords also conduct employment verification, confirming current employment status, job title, and income through pay stubs, W-2 forms, or direct contact with the employer. Previous rental history verification is another standard step, where landlords contact past property managers or owners to inquire about payment history, lease compliance, and how well the property was maintained.
Any discrepancies or negative feedback in these areas, such as a history of late payments or property damage, can significantly impede approval. For first-time renters without established rental histories, landlords may request alternative references from employers or personal contacts, or require a larger security deposit.