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Rising Rent Across The Country

March 15, 2022

Rising Rent Across The Country

Renters in California aren’t the only ones feeling pain in their rental market.

Rents Climb To ‘Insane’ Levels Across U.S.

Rents have exploded across the country, causing many to dig deep into their savings, downsize to subpar units or fall behind on payments, and risk eviction now that a federal moratorium has ended.

In the 50 largest U.S. metro areas, median rent rose an astounding 19.3% in December 2021 from a year earlier, according to a Realtor.com analysis of properties with two or fewer bedrooms. 

“Tampa, Orlando, and Jacksonville — and the Sun Belt destinations of San Diego; Las Vegas; Austin, Texas; and Memphis, Tenn., all saw spikes of more than 25% during that period.

Rising rents are an increasing driver of high inflation that has become one of the nation’s top economic problems. Labor Department data, which cover existing rents and new listings, show much smaller increases, but these are also picking up. Rental costs rose 0.5% in January from December; the Labor Department said last week.

It was the most significant increase in 20 years and probably will accelerate.

Economists worry about the effect of rent increases on inflation because the big jumps in new leases feed into the U.S. consumer price index, which is used to measure inflation.

Inflation jumped 7.5% in January from a year earlier, the most significant increase in four decades. Although many economists expect that to decrease, rising rents could keep inflation high through the end of the year because housing costs make up one-third of the consumer price index.

Experts say many factors are responsible for astronomical rents, including a nationwide housing shortage, extremely low rental vacancies, and unrelenting demand as young adults continue to enter the crowded market.

Whitney Airgood-Obrycki, the lead author of a recent report from Harvard University’s Joint Center for Housing Studies, said there was a lot of “pent-up demand” after the initial months of the pandemic when many young people moved back home with their parents. 

Starting last year, as the economy opened up and young people moved out, “rents really took off,” she said. , According to the U.S. Census Bureau, rental vacancy rates during the fourth quarter of 2021 fell to 5.6%, the lowest since 1984.

Meanwhile, the number of homes for sale has been at a record low,contributing to ballooning home prices that have caused many higher-income households to remain renters, further increasing demand.

Construction crews are also trying to bounce back from material and labor shortages that made a preexisting shortage of new homes even worse at the start of the pandemic, leaving an estimated shortfall of 5.8 million single-family homes, a 51% leap from the end of 2019, Realtor.com said.

And compounding all of this is the increasing presence of investors. A record 18.2% of U.S home purchases in the third quarter of 2021 were made by businesses or institutions, according to Redfin, as investors targeted Atlanta; Phoenix; Miami; Charlotte, N.C.; and Jacksonville, Fla. — popular destinations for people relocating from pricier cities.

Let us help you find the perfect rental property in your budget.For more information on real estate investment; or to see what your rental may be worth with a rental rate calculator, contact True Property Management today – 866-957-6677.

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