For people who don't fall in this category the trend is grim with the rate of rent growth outpacing that of income growth.

Furthermore the current pipeline will continue to support these trends for the foreseeable future. JLL writes:

22,000 additional units are expected to deliver over the next two years, which is a 10% increase to the region's multifamily inventory. Much of the new supply is located in the Ballpark, NoMa, Southwest Waterfront and along the Silver Line in Northern Virginia. This new product, which is located in increasingly desirable neighborhoods where a large concentration of households can afford to pay above-market rents, will drive continued rent growth despite the uptick in supply levels.

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WASHINGTON, DC–The share of households with incomes that can support the average effective multifamily rent in the Washington DC region has dropped from 54.2% in 2006 to 50.9% in 2016. Nonetheless, JLL says in a research note, half of all households can afford the region's average effective rent, and a significant share of households have incomes that can support much higher rent levels. It's conclusion: there is still room for rent growth even though class A rents in the region have grown 3.2% annually, on average, over the past decade.

The reason, of course, is the large percentage of high-income earners: 28%, 29% and 39% of households in Washington DC, Suburban Maryland and Northern Virginia, respectively, earn more than $125,000 annually. Indeed, the share of households with incomes greater than $75,000 grew from 45.6% in 2006 to 53.6% in 2016.

As a rule of thumb: Households with incomes of $125,000 can afford monthly rents of $3.50 per square foot.

For people who don't fall in this category the trend is grim with the rate of rent growth outpacing that of income growth.

Furthermore the current pipeline will continue to support these trends for the foreseeable future. JLL writes:

22,000 additional units are expected to deliver over the next two years, which is a 10% increase to the region's multifamily inventory. Much of the new supply is located in the Ballpark, NoMa, Southwest Waterfront and along the Silver Line in Northern Virginia. This new product, which is located in increasingly desirable neighborhoods where a large concentration of households can afford to pay above-market rents, will drive continued rent growth despite the uptick in supply levels.

Save