Home News Rents are starting to lower — but will it last?

Rents are starting to lower — but will it last?

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Rent is starting to fall after that Spike to record levels But experts aren’t sure if the slowdown will continue.

Christopher Meyer, a real estate professor at Columbia Business School, says people looking for an apartment now may have a better experience than they did in May or June.

“We don’t see rents rising that quickly. The rental market is softening a bit,” he said.

Nationwide, median asking rents increased 14% in July compared to July the previous year, the smallest annual increase since November 2021, according to a new report from . redfinThe percentage is still high, but down from 15% in June and 16% in May.

Experts say the market could slow further towards the end of the year, but there are still many uncertainties.

“I wouldn’t be surprised if it’s 2023 before things really get back to normal,” said Senior Editor-in-Chief Brian Carberry. rent.coman apartment search website owned by Redfin.

A lot depends on where you live. Florida cities such as Boca Raton and West Palm Beach saw rent declines of -0.1% and -0.5% respectively compared to last month. But rents in coastal California cities like San Diego have continued to climb over the past year, according to Apartment List.

Rents fell in certain American cities, but rose in others.
Getty Images

Rent in Rochester, New York rose 15.3% in August compared to the same month last year, according to Apartment List data. The average two-bedroom apartment in the Rochester area was $1,318 in August, compared with $1,116 a year ago.

Bank of America Chief Executive Brian Moynihan said high rents were a concern because they could make up a large portion of a household’s take-home income.

gas fee are coming back, but rents are up 10, 12, 15%. And rent could end up making up his 40% of income for these households,” Moynihan said in his recent AP interview.

Things look a little better for renters than they did a few months ago, but it’s still a landlord’s market, Mayer said.

New York City hit a record high in its own rents over the past year.
New York City hit a record high in its own rents over the past year.
Christopher Sadowski

If your lease is expiring, continuing to negotiate with landlords may be a better option than trying to move, at least until the rental market slows further, according to an industry survey from the National Association of Apartments and said Paula Munger, Vice President of Analytics. .

“When you renew your lease, you never pay as much as someone new moves in,” says Munger. “If possible, please stay in your apartment.”

The main reason for the surge in rents is increased demand from people who have been discounted from the booming housing market. That market is starting to slow, which could mean more people can afford to buy and don’t have to rent, but with interest rates rising, some people don’t want to take out a mortgage. There may be

“Right now, there’s a lot of inflation going on across the market, and there’s not enough supply, so prices are going up,” Munger said. “That’s the downside for people. It’s that they don’t have enough choices and choices about what they want in a housing unit.”

That was the experience of 22-year-old Los Angeles resident Erika Tascon, who lived with a roommate but wanted to find an apartment with her boyfriend.

After visiting over a dozen homes, the couple chose a 500-square-foot, one-bedroom apartment in Beverly Hills, paying $2,750 a month. The median rent for a one-bedroom in the area is his $2,773, up 14% from last year, according to Zumper data.

It will end up being cheaper to stay in your current apartment than looking for a new one.
It will end up being cheaper to stay in your current apartment than looking for a new one.
Getty Images

“I think the landlord is taking tenants now,” said Tuscon, who is paying $200 more a month than his previous apartment.

In Britni Eseller’s case, demand was so high that she had to fill out an application in a rush to beat 10 other people touring her desired apartment.

“Everyone is in scarcity mode, so I’m happy to find a place that’s somewhat affordable. Unfortunately, I’m okay with seeing chipped floors and broken appliances,” says Essler, who lives in North Park near Sun. said. Diego.

Developers are building more condominiums this year, which could ultimately help ease the crisis.

Meanwhile, high rents have disproportionately affected low-income residents across the country, according to Ben Martin, research director of Texas Housers, a nonprofit that works on housing justice. It is said that he is giving a blow.

Dallas and Fort Worth rental prices rose 21.6% in May from last year, according to Redfin data. In Austin he was up 48.4%. One of the main reasons is that high-income people from coastal areas like California and New York have moved to Texas during the coronavirus pandemic, realizing they can work remotely and live cheaper. For example, last December, Tesla moved its headquarters from Silicon Valley to Austin.

Tenants leaving New York City for cheaper markets in other parts of the country are driving prices up in those areas as well.
Tenants leaving New York City for cheaper markets in other parts of the country are driving prices up in those areas as well.
Getty Images

“Those with the lowest incomes are paying more than the total money pie,” Martin said. “That means we don’t have the money to buy school supplies, groceries, gas, clothes, and everything else we need.”

In addition to lowering basic costs, renters are packing more people into their apartments, Martin said.

More and more people can’t afford their homes and face evictions. The government has ended moratoriums on evictions and rental assistance programs that allow people to stay home during the pandemic.

The Eviction Lab, a research institute at Princeton University, is seeing record numbers of evictions that exceed pre-pandemic levels.

In Houston, where the eviction moratorium ends in July 2021, there were 7,242 eviction applications this July, 51% above average, according to The Eviction Lab. Other cities, such as Los Angeles, have extended moratoriums on evictions through the end of the year.

Unable to raise rents or move, tenants are often forced to choose between paying rent and providing for basic necessities. Evictions will be on the tenant’s record and make it harder to find housing in the future.

“The threat of eviction is a looming problem,” says Nick Graetz, a postdoctoral researcher at The Eviction Lab. “Part of the reason renters are sacrificing so many other things in trying to pay exorbitant rent each month is because of the constant threat of being evicted from their homes.”

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