Jun 21, 2021

Rental Rates Are Going Through The Roof

Following the trend in housing prices, now rental rates in many markets are also going through the roof.  Landlords who may not have been able to raise rents during the Pandemic are doing it now.  And, the fact that our country is short 5 million or more homes is not helping matters.  Clearly, there is more demand than there is supply, which is driving up both home prices and rents.  Many people that want to buy homes have been priced out of the market and or are waiting until prices come back down, or there is more to choose from in housing market.  

Landlords are taking advantage of these trends as an opportunity to raise rents, which have been fairly stable for quite some time.  This also reflects the inflation that is hitting our country as a result of all the government money sloshing around.  There is a pretty good chance that rents will go up 10 - 20% in many markets in the country in the next year.

This may very well cause renters to rent smaller dwellings, whether homes or apartments than they otherwise might to contain cost.  Real estate is actually pretty predictable in terms of how prices drive behaviors.  Rental rates going up was pretty predictable given the demand for housing.   First time home buyers have been priced out of many markets.  They can't compete with buyers bidding up prices often paying more than list price.  So, these otherwise buyers are forced to rent until the housing market cools down, which could be several years because demand is still outpacing supply.